Markets mixed as oil slips on disputed Iran reports; Goldman Sachs lifts S&P 500 target
The Dow Jones Industrial Average rose 0.4% on Wednesday, while the S&P 500 and Nasdaq Composite remained flat. Investors digested conflicting reports on US-Iran diplomacy and strong earnings data from the banking and technology sectors.
US stock markets closed in mixed territory on Wednesday, with the Dow Jones Industrial Average advancing 0.4% while the S&P 500 and Nasdaq Composite hovered near the flatline. The divergence in performance followed a volatile session driven by geopolitical speculation and a sharp, albeit temporary, decline in crude oil prices. Market sentiment was heavily influenced by reports from Iranian state media suggesting a draft memorandum would see the reopening of the Strait of Hormuz, a claim the White House subsequently dismissed as a "complete fabrication."
Crude oil prices fell sharply on the initial news, with Brent crude dropping below $93 per barrel and West Texas Intermediate trading below $90. Futures for both benchmarks recovered some losses later in the session after US officials denied the validity of the reported agreement. Secretary of State Marco Rubio cautioned that any potential deal would likely take several days to formalise, leaving the vital waterway largely shut to commercial traffic despite the diplomatic chatter.
In the banking sector, JPMorgan Chase shares fell up to 2.5% after the institution raised its full-year cost estimate by $1 billion to approximately $106 billion. Chief Executive Jamie Dimon attributed the increase to stronger-than-expected trading revenue and investment banking fees, describing the additional expense as a positive indicator of business performance. The broader banking industry has benefited from heightened activity driven by the artificial intelligence boom and ongoing geopolitical events.
Technology and semiconductor stocks continued to dominate market attention, with Micron Technology and SK Hynix both reaching a $1 trillion market capitalisation. The milestone for Micron, which crossed the threshold on Tuesday, was followed by SK Hynix jumping more than 12% in Asian trading. The surge reflects intense demand for high-bandwidth memory chips required for AI infrastructure, although broader tech momentum showed signs of fading as the Nasdaq Composite dipped 0.1%.
Goldman Sachs raised its year-end S&P 500 target to 8,000 from 7,600, citing robust earnings growth and the continued benefits of AI infrastructure investment. The investment bank noted that conditions marking the end of past bull markets remain absent, although it warned that the outperformance of the AI trade raises hurdles for future gains. In other corporate news, Lululemon stock rose 3% after settling a leadership dispute with founder Chip Wilson, clearing the path for incoming CEO Heidi O’Neill.
