The S&P 500 surged 1.46% to close at a record 7,365.42 on Wednesday, blowing past the 7,300 level for the first time as optimism about a potential US-Iran peace deal combined with blockbuster earnings from AMD and Disney to ignite a broad-based rally. The Dow Jones Industrial Average gained 612 points (+1.24%) to 49,910.18, while the Nasdaq Composite jumped 2.02% to 25,838.34 — also a record close.
All 11 S&P 500 sectors finished higher except energy, which fell 4.2% on the oil price collapse. Industrials led the advance at +2.7%, followed by technology at +2.3%, consumer discretionary at +1.9%, and financials at +1.5%. Breadth was strong with 408 of 500 S&P components advancing — the widest positive breadth reading since November 2024.
Earnings Season Momentum
With 82% of S&P 500 companies having reported Q1 results, aggregate earnings growth stands at 14.2% year-over-year — the strongest since Q1 2022. Revenue growth is tracking at 7.8%, with 73% of companies beating estimates by an average of 4.1%. The technology sector leads with 22% earnings growth, followed by healthcare at 16% and communication services at 15%.
Rate Cut Expectations Shift
The rally was amplified by shifting rate-cut expectations. Fed funds futures now price in a 72% probability of a July rate cut (up from 58% a week ago), with traders reasoning that a peace deal would lower oil prices and ease inflation pressures. The 10-year Treasury yield fell 4 basis points to 4.38%, while the 2-year yield dropped 6 basis points to 4.12%, flattening the curve.
The CBOE Volatility Index (VIX) plunged 2.4 points to 14.8, its lowest close since February 12 and well below the long-term average of 19.5. The put-call ratio on S&P 500 options fell to 0.68, indicating elevated bullish positioning.
Technical Levels
The S&P 500 has now posted four record closes in five sessions. The index is trading 8.2% above its 200-day moving average and 4.1% above its 50-day — both levels that historically suggest momentum continuation rather than reversal. The next resistance level identified by technical analysts is the round-number 7,500, while support sits at the prior breakout level of 7,180.