The U.S. stock market reached new milestones on Thursday as the S&P 500 and Nasdaq closed at record highs following reports that Washington and Tehran had agreed to a draft framework extending their ceasefire for another 60 days.

According to reports, the proposed agreement would create additional time for negotiations surrounding Iran’s nuclear program, though final approval from President Donald Trump remains pending. The prospect of reduced geopolitical risk helped support investor sentiment despite ongoing concerns surrounding inflation and global energy markets.

The S&P 500 rose 0.58% to close at 7,563.71, while the Nasdaq Composite gained 0.91% to finish at 26,917.47. The Dow Jones Industrial Average also moved higher, adding 24 points to close at 50,666.29.

Geopolitical Optimism Supports Risk Assets

Markets have remained highly sensitive to developments involving the Middle East conflict and the Strait of Hormuz, a critical global energy shipping route. News suggesting progress toward a longer ceasefire reduced some immediate concerns about further disruptions to energy supplies and broader economic stability.

While investors welcomed the diplomatic developments, analysts noted that inflationary pressures resulting from higher energy costs may persist even if tensions continue to ease.

Market participants have increasingly focused on balancing geopolitical developments with economic fundamentals, particularly inflation and central bank policy expectations.

AI and Technology Stocks Continue Leading the Rally

Technology shares once again provided much of the market’s upward momentum.

Microsoft advanced after reports indicated the company plans to introduce a new coding-focused artificial intelligence model next week. Marvell Technology also gained after UBS increased its price target, reflecting ongoing optimism surrounding AI infrastructure demand.

Snowflake emerged as one of the session’s strongest performers after raising its annual product revenue forecast and announcing a five-year, $6 billion artificial intelligence infrastructure agreement with Amazon Web Services.

The positive sentiment extended across the software sector, lifting shares of Datadog and MongoDB as investors continued favoring companies positioned to benefit from enterprise AI adoption.

Healthcare Sector Adds Additional Support

Healthcare stocks also contributed significantly to the market’s gains.

Eli Lilly advanced after CVS Health announced it would restore coverage for the company’s weight-loss drug Zepbound while also adding coverage for its newly approved obesity pill. The development reinforced investor confidence in the rapidly expanding obesity treatment market.

The healthcare sector’s strong performance provided additional breadth to the rally beyond the technology industry.

Earnings Strength Helps Offset Valuation Concerns

Despite concerns that major equity indexes are trading above long-term valuation averages, investors have remained willing to support higher prices because corporate earnings expectations continue improving.

Many portfolio managers argue that rising earnings forecasts are helping justify elevated market multiples, particularly among companies benefiting from artificial intelligence, cloud computing, healthcare innovation, and digital transformation trends.

The combination of resilient earnings growth, easing geopolitical fears, and continued enthusiasm surrounding AI-related investments has helped sustain market momentum despite inflation remaining above central bank targets.

Looking Ahead

Investors will continue monitoring developments surrounding the proposed U.S.-Iran ceasefire extension, inflation trends, and upcoming economic data releases. Any indication that geopolitical risks are easing further could support additional gains, while persistent inflation pressures may continue influencing expectations for future Federal Reserve policy decisions.

Confidential Advisory: This article is for informational purposes only and should not be considered financial or investment advice. Readers should conduct independent research before making investment decisions.