Ceasefire Extension Keeps U.S. Stocks at Record Highs

U.S. stock benchmarks reached record levels on Wednesday as traders monitored a temporary ceasefire extension in the Middle East, a rise in oil and a firm U.S. dollar.

The Nasdaq has risen about 6.5% and the S&P 500 about 4.55% since last Monday. U.S. indexes recorded all-time highs in three straight sessions last week and remain above those levels into midweek.

Iran has said it would send a delegation to talks only if the negotiations serve its national interests. Political divisions within Iran mean the outcome remains uncertain, and traders are watching the next negotiation deadline.

Oil prices recovered from a dip below $85 last Friday to trade near $90 a barrel after an attack on a third tanker transiting the Strait of Hormuz, which is operating under a U.S. blockade. The attack increased concerns about supply along a key global shipping route.

The U.S. dollar index stayed above 98 after testimony at a Senate hearing for Federal Reserve nominee Kevin Warsh. Warsh outlined plans to drop forward guidance, reduce the Fed's balance sheet and adopt a new inflation framework. He declined to answer some questions about potential disagreements with the president. His remarks coincided with a short-term market pullback and a firmer dollar tone.

U.S. retail sales rose 1.7% month-over-month. In Canada, consumer price inflation was 2.4% year-over-year with a 0.9% monthly gain, and the Bank of Canada left interest rates unchanged. The Canadian dollar recovered against several peers after recent crude price swings and the domestic data.

Market breadth is narrow, with concentrated gains in technology stocks cited as a main driver. U.S. benchmarks are roughly 50% higher compared with the same period a year earlier.

‘Traders are cautious about the next deadline,' Elior Manier, a market analyst, warned, noting that geopolitical headlines will remain a key variable for oil and the dollar.

Traders will watch further diplomatic developments, additional economic releases and any follow-up Gulf incidents, along with central bank decisions and data from the U.S. and Canada scheduled for the coming days.