NEW YORK: US stocks climbed further on Wednesday afternoon, after a news report that Iran had signaled openness to talks and a pledge by President Donald Trump to steady oil markets calmed investor anxiety about the Mideast clash.
Investors flocked again to tech shares, lifting the Nasdaq 1.52 per cent and keeping the tech-heavy index in positive territory since the US-Israeli strike on Iran that ignited the conflict in the Middle East.
The S&P 500 remained less than two per cent from its all-time closing high, in January.
A New York Times report said Iranian intelligence operatives indirectly reached out to the CIA a day after the attacks, but US officials remain skeptical that either the Trump administration or Iran is prepared for a near-term de-escalation.
Trump's announcements of a US naval escort for oil tankers through the Strait of Hormuz and political risk insurance also brought some relief.
Investors scooped up tech-related stocks that sold off heavily in February, with Nvidia up 2.3 per cent, Amazon.com adding 3.7 per cent and Applied Digital jumping 9.3 per cent.
The prospect of the war spurring additional inflation is one of the main reasons for market volatility on the horizon, said Richard Bernstein, chief executive officer of Richard Bernstein Advisors.
"If people think the war will be short-lived or 'not an issue' for the US economy, then the stock market will likely rally," he said. "The opposite seems true too. Long-lived and impacting the US economy could mean more volatility."
At 2.24pm EST, the Dow Jones Industrial Average rose 0.58 per cent to 48,782.23 points, the S&P 500 gained 0.96 per cent to 6,881.87 and the Nasdaq Composite gained 1.61 per cent to 22,879.27 points.
"Until people think what's happening in the Middle East will cause a recession, they're giving stocks the benefit of the doubt," said Chris Zaccarelli, chief investment officer for Northlight Asset Management.
Oil and gas producers declined, including ConocoPhillips which was down 2.8 per cent. The energy sector led declines on the S&P 500 with a 1.4 per cent fall.
Several Middle Eastern countries have temporarily halted oil and gas production and the US was looking to expand its campaign inside Iran.
The US oil-price benchmark was last at US$74, while Brent prices stood at US$81.
The CBOE volatility index, also known as Wall Street's fear gauge, dropped 12 per cent to 20.56, while the rate-sensitive Russell 2000 index added 1.2 per cent.
Policymakers have offered mixed views on the impact the conflict will have on the Federal Reserve's monetary policy outlook, while Goldman Sachs CEO David Solomon said markets may take a while to fully digest the repercussions.
Investors have pushed back expectations for a 25-basis-point interest rate cut to September from July.
Drugmaker Moderna added 15.8 per cent after agreeing to pay up to US$2.25 billion to settle a long-running legal fight over a COVID-19 vaccine patent.
Meanwhile, a private survey showed private payrolls increased more than expected in February, while a separate report pointed to strong services activity.
