Stocks experienced a significant rally on Wednesday, buoyed by reports suggesting that the U.S. and Iran may soon reach an agreement to resolve the conflict that escalated in late February. Positive job data and substantial earnings growth from major corporations further contributed to the market’s optimistic momentum. The S&P 500 and Nasdaq Composite both secured record closes for the second consecutive day, marking a noteworthy uptick since the recent tension began.
By the end of trading, the S&P 500 had risen 1.5% to reach 7,365, while the tech-heavy Nasdaq saw an increase of 2.0%, closing at 25,838. The Dow Jones Industrial Average, generally more stable, grew by 1.2% to finish at 49,910, though it remains 0.6% shy of its all-time high from February.
In a post on Truth Social, President Donald Trump commented on the potential agreement with Iran, suggesting that if the nation complies with the terms, it could signal an end to the conflict. Trump underscored the importance of a successful negotiation, warning that failure to reach an accord could lead to a much more intense military response.
Contrarily, oil prices took a dive in response to the anticipated resolution, with West Texas Intermediate crude futures plummeting approximately 7% to $95.08 per barrel, marking their lowest close since April 24.
The ADP National Employment Report released earlier in the day revealed that private payrolls grew by 109,000 in April, surpassing economists’ expectations of 84,000. This marked a significant increase, representing the most robust growth since early 2025. Major gains were observed in both large and small companies, although there were indications of a slowdown among mid-sized firms. Dr. Nela Richardson, chief economist at ADP, noted the contrasting dynamics benefiting large corporations and nimble small businesses in the current labor market.
Education and healthcare sectors led job creation, adding a combined 61,000 new positions. However, the business and professional services sector showed the most substantial decline, losing 8,000 jobs. Despite the strong ADP results, analysts cautioned that this might not directly correlate with the upcoming nonfarm payrolls report, as historical trends indicate fluctuations between these two measurements.
In corporate news, Advanced Micro Devices (AMD) emerged as a strong performer, surging 18.6% following exceptional quarterly earnings that nearly doubled from the previous year. The company reported earnings of 84 cents per share and a 38% increase in revenue, amounting to $10.3 billion. AMD’s CEO, Lisa Su, raised the company’s growth forecast for the server CPU market dramatically, predicting a 35% annual growth rate for the next three to five years, driven by increased demand for artificial intelligence technologies.
In contrast, Klaviyo experienced a dramatic 32.3% drop in stock value following its earnings report, marking the largest single-day loss since its public debut in September 2023. While the marketing software firm exceeded earnings expectations and raised its full-year outlook, analysts pointed to various uncertainties, including rising carrier fees, increased investments in AI, and leadership changes at the company.
Despite these fluctuations, analysts maintained a largely positive outlook for the tech sector, particularly emphasizing AMD’s potential for future growth and market share gains amidst a competitive landscape.
