US stock indexes closed higher on Thursday as investors reacted to positive economic data and renewed diplomatic optimism regarding the ongoing conflict between the United States and Iran.

Key Points

• The Dow Jones Industrial Average reached a 3.25-month high, supported by a 12% surge in IBM shares following news of a $1 billion government quantum-computing grant.
• Crude oil prices retreated from early highs after reports suggested progress in diplomatic negotiations to reopen the Strait of Hormuz.
• US manufacturing activity unexpectedly expanded to a four-year high, while weekly initial unemployment claims remained stable at 209,000.
• AI-infrastructure stocks, including ARM Holdings and Rigetti Computing, saw significant gains, while Intuit and Walmart shares declined following disappointing earnings forecasts.
• Approximately 83% of S&P 500 companies that have reported first-quarter earnings have exceeded analyst expectations.

Why it Matters

Market sentiment remains heavily influenced by the volatility of crude oil prices and the potential for energy supply disruptions stemming from the US-Iran conflict. Investors are balancing these geopolitical risks against strong corporate earnings and resilient domestic economic indicators, which continue to provide a floor for equity valuations.