Stocks marched higher in afternoon trading on Wall Street as the U.S. and Iran pulled back from a potential conflict.
Markets started the day recovering from overnight declines following Iran’s missile attacks on U.S. bases in Iraq. Statements from both nations calmed fears that the conflict could spiral into a series of retaliations. The latest attacks came in response to a U.S. drone strike last week that killed a top Iranian general.
President Donald Trump’s comment Wednesday that Iran appears to be “standing down” further eased tensions. He indicated that the U.S. won’t use its military to retaliate for the strikes, which did not result in any American or Iraqi deaths.
The S&P 500 index and Nasdaq were on track to set new record highs after several tense days in anticipation of Iran’s retaliation.
Technology companies led the gains. Apple rose 1.4% and Microsoft climbed 1.5%.
Banks also broadly rose as bond yields moved higher. The yield on the 10-year Treasury rose to 1.86% from 1.82% late Tuesday. Higher yields allow banks to charge more lucrative interest on mortgages and other loans.
Oil prices fell sharply as traders became less worried about supply disruptions from the Middle East. The 5% drop in crude oil dragged down energy stocks. Phillips 66 fell 3.3% and Schlumberger shed 2.4%.
KEEPING SCORE: The S&P 500 index rose 0.6% as of 1:17 p.m. Eastern time. The Dow Jones Industrial Average rose 179 points, or 0.6%, to 28,762. The Nasdaq rose 0.7%. The Russell 2000 index of smaller company stocks rose 0.4%.
OVERSEAS: Markets in Europe recovered and made gains after making sharp drops overnight. Asian markets fell. Japan’s Nikkei 225 shed 1.6% and The Shanghai Composite Index lost 1.2%
WEAK RESULTS: Walgreens fell 6.1% after reporting a disappointing 25% drop in profit during its fiscal first quarter on weak sales growth. The world’s largest drugstore chain is going through a cost-cutting program and expects earnings to be flat this year.
JET CONCERNS: Boeing fell 1.4% after one of its 737-800 aircraft flown by Ukraine International Airlines crashed in Iran shortly after takeoff, killing all on board. The cause of the crash is under investigation. It occurred after Iran fired missiles at U.S. bases in Iraq. Boeing is also still dealing with the grounding of its 737-Max jets because of catastrophic technical issues.