On Wall Street, the benchmark S&P 500 and tech-heavy Nasdaq rallied to record closing highs on Wednesday as investors were encouraged by corporate earnings and hopeful of progress in U.S.-Iran negotiations.

Equities have found support this week from investor hopes that Washington and Tehran could return to the negotiating table with a view to ending the war, which has caused widespread disruption in global oil markets, reignited inflation concerns and muddied the interest-rate outlook.

The Dow Jones fell 72.27 points (−0.15%) to 48,463.72, while the S&P 500 rose 55.55 points (+0.80%) to 7,022.93 and the Nasdaq gained 376.93 points (+1.60%) to 24,016.02.

The benchmark S&P 500 index hit its first intraday record since the conflict erupted and notched a record closing high on Wednesday after ending Tuesday's session slightly below the 6,978.60 record of January 27.

White House press secretary Karoline Leavitt told ‌reporters that discussions about ⁠a second ⁠round of talks with Iran were ongoing and productive but said reports that the U.S. requested a ceasefire in the Iran war were wrong.

Meanwhile, the U.S. Treasury Department said it was targeting Iran's oil transportation infrastructure with sanctions on more than two dozen individuals, companies and vessels.

The gains suggest that war-weary investors are ready to rotate into risk assets at the slightest indication of a de-escalation in the conflict. Jeff Schulze, head of economic and market strategy at ClearBridge Investments, said a ceasefire extension or progress in U.S.-Iran negotiations would be "a pretty good development for the ⁠energy market and ‌then the U.S. economy."

"Markets rarely wait for information to be complete," he said. "Although there is still uncertainty out there with regard to the energy disruption, markets are rightly assessing that the risks are declining and the path of least resistance is up."

Schulze also said ⁠that while earnings season is still relatively young, "it's off to a good start so far." Shares of Bank of America rose after the second-biggest U.S. lender reported growth in first-quarter profit. Shares of Wall Street heavyweight Morgan Stanley rallied after it reported a jump in quarterly profit. They helped boost the S&P 500 financial index.

Wall Street's fear gauge, the CBOE volatility index , hit its lowest level since February 26 earlier on Wednesday.

The S&P 500 information technology index advanced, with a boost from software stocks as the S&P 500 software and services index rallied in its third straight day ‌of gains.

Industrials and materials were among the lagging sectors.

MORE EVIDENCE NEEDED

Some strategists cautioned that new catalysts may be needed to sustain market momentum.

"We're going to need more concrete evidence now that the folks that want to get together and talk about peace are able to accomplish something before the deadline of this ceasefire," said ⁠Art Hogan, chief market strategist at B. Riley Wealth. The International Monetary Fund cut its global growth outlook on Tuesday, citing the war-driven energy price spikes, and warned that an extended conflict could push the world to the brink of recession. Meanwhile, Federal Reserve Bank of Cleveland President Beth Hammack said that while she sees no imminent need for the central bank to change its interest-rate target setting, it is possible cuts or even hikes could lie ahead.

Oil prices rose very slightly on Wednesday and were still well above pre-war levels.

QUANTUM COMPUTING

Among quantum computing stocks, Rigetti Computing, D-Wave Quantum and Arqit Quantum rallied sharply. Among other stock movers, Broadcom advanced after Meta extended its custom chips deal with the firm. Snap shares rose after it said it would lay off about 1,000 employees, while footwear maker Allbirds shares surged following an announcement that it would pivot to AI infrastructure.