U.S. Indices Hit Record Highs as Iran Ceasefire Extension Boosts Risk Appetite

U.S. equity markets surged on Wednesday, with the Nasdaq and S&P 500 closing at record highs. The Dow Jones Industrial Average also posted gains, rising approximately 0.7%, while the S&P 500 climbed 1% and the Nasdaq jumped more than 1.6%. Investor sentiment was primarily lifted by the extension of a ceasefire with Iran by President Donald Trump, which reduced geopolitical risk premiums. This optimism coincided with a robust earnings season, particularly within the artificial intelligence and semiconductor sectors. Micron Technology led the charge, surging 8.5% to a record close. This contributed to the Philadelphia Semiconductor Index achieving its 16th consecutive day of gains and its 11th straight intraday record. In extended trading, Tesla shares rose 4.5% following a surprise report of positive free cash flow for the first quarter. Despite the broad rally, some firms struggled. ServiceNow shares plummeted 13% in after-hours trading, citing delayed subscription revenue growth caused by ongoing tensions in the Middle East. Lululemon Athletica also saw a decline, dropping 5% in extended trading after naming former Nike executive Heidi O'Neill as CEO amid pressure from activist investors. The current trend suggests a 'full speed ahead' approach to AI capital expenditure, which continues to propel the tech-heavy Nasdaq. However, the divergent performance of ServiceNow highlights that geopolitical instability still poses a tangible risk to corporate deal closures.