U.S. stocks rose slightly at the start of trading on Wednesday, with the S&P 500 index nearing its all-time highs, after ending the previous session less than 1% away from that level.
The broad market index rose by 0.2%, as did the Nasdaq Composite, while the Dow Jones Industrial Average added about 157 points, or 0.3%.
In this context, Broadcom's stock emerged as one of the biggest gainers during the session, rising by 2%, supported by Meta Platforms' announcement of extending its partnership with the company to use its technologies in developing custom chips.
Strong momentum extending from previous sessions
This performance followed a strong session the previous day, with the S&P 500 rising 1.2%, the Nasdaq jumping 2%, and the Dow Jones climbing more than 300 points.
The S&P 500 index approached its all-time high of 7002.28 points, which was recorded on January 28, as the index saw gains in 9 out of 10 sessions, while the Nasdaq recorded 10 consecutive sessions of gains.
On the other hand, Monday’s gains helped erase all the losses the index had suffered since the outbreak of war with Iran at the end of February, reflecting the strength of the market recovery.
Optimism about the negotiations supports the appetite for risk.
The prospect of an agreement between the United States and Iran has prompted investors to increase their appetite for stocks, especially after statements by US President Donald Trump regarding the other side's strong desire to reach an agreement.
A White House official indicated that a second round of negotiations between Washington and Tehran is under consideration, without specifying an official date yet.
Trump also boosted optimism in the markets, stating that the war with Iran may be nearing its end, and reaffirming that Tehran is strongly seeking to reach an agreement.
Continued caution despite the positive signs
Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management, explained that the conflict is far from over, noting the continued presence of numerous risks in the markets. His remarks reflect a balance between optimism regarding a political solution and concern about the ongoing tensions.
However, Schott pointed out that there are long-term investment opportunities, as investors have begun to return to their favorite stocks.
Schutte added that investors are currently moving towards reallocating their investments, focusing on opportunities that have not performed strongly in recent years.
These moves reflect a shift in investment strategies, especially in a tight market that has seen concentrated performance in previous periods.
Overall, this trend suggests that the next phase may see a broader revaluation of stocks, as investors look for new growth opportunities outside the sectors that previously led the market.
