The S&P 500 edged higher on Tuesday as strong corporate earnings and renewed optimism around artificial intelligence investments outweighed persistent concerns over a looming deadline for a U.S.-Iran ceasefire agreement.
At 09:45 a.m. ET, the Dow Jones Industrial Average rose 309.83 points, or 0.63%, to 49,752.39, while the S&P 500 gained 12.30 points, or 0.17%, to 7,121.44 and the Nasdaq Composite added 34.10 points, or 0.14%, to 24,438.49. This marked a reversal from Monday’s session, when major averages slipped as traders braced for the potential collapse of peace talks ahead of the ceasefire’s expiration on Wednesday.
Market movement was shaped by competing forces: geopolitical tension over the Strait of Hormuz and robust corporate performance, particularly in technology, and healthcare. Oil prices reversed recent declines, with West Texas Intermediate futures climbing 4% to above $93 per barrel and Brent futures advancing similarly to trade above $99 a barrel, reflecting investor anticipation of a diplomatic resolution — or its failure.
Despite the volatility, corporate earnings provided a counterweight. Of the 48 companies in the S&P 500 that had reported results by the end of the prior week, 87.5% surpassed analyst estimates, significantly above the long-term average of 67.4%, according to LSEG data cited in The Detroit News. Thomas Hayes, chairman at Great Hill Capital, noted that earnings strength was “overpowering the narrative” of geopolitical risk.
Healthcare stocks showed mixed results. UnitedHealth jumped 9.2% after raising its annual profit forecast and beating first-quarter expectations, becoming the largest contributor to the Dow’s gains. CVS Health and Humana also rose, gaining 1.7% and 5.2% respectively. However, the broader healthcare sector dipped 0.5%, limiting upside in the S&P 500.
Technology and AI-related investments continued to draw capital. Amazon shares rose 2% after announcing plans to invest up to $25 billion in AI startup Anthropic, a move that helped drive the S&P 500 consumer discretionary sector up nearly 1% — the largest gain among benchmark sectors. J.P. Morgan responded by raising its year-end target for the S&P 500, citing AI-driven and tech-led earnings as key catalysts.
Not all tech benefited equally. Apple declined amid broader sector pressure, while GE Aerospace fell 3.1%, citing concerns over elevated oil prices, fuel supply constraints, and slower global growth as it braces for a more challenging operating environment.
Geopolitical uncertainty remained a persistent undercurrent. The Latest York Times reported that Vice President JD Vance’s planned trip to join Iran negotiations was paused due to lack of response from Tehran. President Donald Trump, speaking to CNBC earlier in the day, reiterated his expectation of a “great deal” with Iran but emphasized that the U.S. Military remained prepared to act if no agreement was reached by the ceasefire deadline, which he declined to extend.
Trump’s comments followed a Truth Social post in which he accused Iran of violating the ceasefire “numerous times.” Earlier in the week, oil markets had reacted to mixed signals: a brief increase in commercial shipping through the Strait of Hormuz over the weekend was followed by renewed slowdown after reports of vessel attacks and the U.S. Seizure of an Iranian cargo ship.
Brian Mulberry, chief market strategist at Zacks Investment Management, expressed confidence that control over the Strait — a critical chokepoint for global oil flows — would be resolved by week’s end, suggesting that commodity prices would stabilize once traffic normalized.
The market’s resilience underscored a broader trend: even amid foreign policy volatility, investors are placing significant weight on earnings momentum and long-term technological bets. As one observer noted, the strength of first-quarter results — particularly the anticipation of double-digit earnings growth — should not be overlooked in assessing the market’s trajectory.
Why did the S&P 500 rise despite concerns over the Iran ceasefire deadline?
The index gained ground because strong corporate earnings — especially in healthcare and technology — and renewed investor confidence in AI investments, such as Amazon’s $25 billion commitment to Anthropic, outweighed geopolitical worries. Over 87% of S&P 500 companies that reported earnings beat estimates, providing a powerful counterbalance to market volatility.
How are oil prices and the Strait of Hormuz influencing market sentiment?
Oil prices rose as investors weighed the prospects of a U.S.-Iran diplomatic agreement, with Brent and WTI futures each gaining about 4%. Market participants are watching closely for signs of stabilized shipping through the Strait of Hormuz, a key oil transit route, where recent vessel attacks and a U.S. Seizure of an Iranian ship have heightened fears of disruption.