The session appeared to reflect two competing narratives, with earnings-related developments receiving greater investor attention . All three major US averages closed at fresh all-time highs on Thursday — the S&P 500 up 0.58%, the Nasdaq Composite up 0.91%, and the Dow Jones Industrial Average scraping out a 0.05% gain — even as Iranian armed forces reportedly launched missiles at unidentified targets late Thursday local time, rattling a ceasefire that markets had spent much of the session pricing as settled, according to CNBC’s Lisa Kailai Han.
The whipsaw in the geopolitical backdrop was almost theatrical in its timing. Axios reported, citing two US officials and a regional source, that US and Iranian negotiators had agreed on a 60-day memorandum of understanding to extend the ceasefire and open negotiations on Iran’s nuclear programme — pending President Donald Trump’s final approval. A White House official later confirmed to CNBC that the two sides had “mostly agreed” on terms. Equities ran to session highs on that news.
Then, within hours, Iran’s state media outlet Fars reported the missile launches. Futures this morning — NQ1! down 0.16%, ES1! and DJIA futures near the flatline — suggest the overnight missile reports haven’t broken the mood, but they haven’t been dismissed either.
AI Earnings Remain a Key Driver of Market Sentiment
What kept the session from reversing wasn’t diplomatic optimism — it was the earnings tape. Kate Moore, chief investment officer at Citi Wealth, made the call explicitly on CNBC’s Closing Bell: Overtime on Thursday afternoon:
“I really do think what’s been driving the market higher is, frankly, the power of the technology earnings… this has been happening company after company throughout the course of this earnings season.”
She went further, framing the geopolitical risks as a secondary variable the market is deliberately setting aside: “If the markets are only focusing on one thing at a time, they’re not really focusing on the Iran war and the implications of higher oil prices and higher chemical prices on a broad swath of consumer goods. They’re instead saying this AI and technology super cycle is full steam ahead.”
That’s not bullish spin — it’s a positioning observation. When investors are willing to buy all-time highs on a day when Iranian missiles are in the air, the earnings narrative appears to be carrying significant influence over market sentiment.
The data point that crystallises this most sharply is Dell Technologies, which surged sharply in extended trading after raising its full-year guidance and posting a first-quarter beat on both revenue and earnings, per CNBC. A large after-hours move on an established large-cap hardware name is not a normal event — it may suggest that investors reassessed expectations for AI infrastructure demand following the results . For Nasdaq-heavy funds, that single name could provide a meaningful lift into Friday’s open.
The Consumer Discretionary Divergence
Not everything in the earnings stream is pointing the same direction. American Eagle Outfitters fell 11% in extended trading after comparable sales at its American Eagle banner dropped 2% in the first quarter.
The contrast with Dell is instructive: the market is rewarding AI-adjacent infrastructure names and punishing discretionary retailers facing the consumer squeeze that Moore flagged — higher oil prices and higher chemical prices flowing through to goods costs. That’s not a one-session divergence; it’s a sector rotation that has been building through this earnings season and is now showing up clearly in post-close prints.
For traders watching index-level moves, the Nasdaq’s outperformance versus the Dow this week — up more than 2% versus the Dow’s sub-1% weekly gain — reflects exactly this split. The month-end picture reinforces it: the Nasdaq is heading for an 8% May advance, the S&P 500 is up nearly 5% for the month, and the Dow is on track for roughly 2%, per CNBC. May’s gains have been driven disproportionately by technology-related stocks relative to some other sectors
The Ceasefire Risk the Market Is Carrying Into the Weekend
Moore’s characterisation of the post-March recovery — “acceptance that there was going to be a resolution at some point, but obviously the scope of that and the timing of that is still anybody’s guess” — is the most honest framing of the current positioning risk. The market has been trading a resolution thesis, not a confirmed resolution. Those are very different things.
Friday’s missile report complicates the extension narrative meaningfully. A 60-day MOU that is still pending presidential approval, followed within hours by Iranian military action, is not a settled ceasefire — it’s a ceasefire that is being tested in real time. The oil market’s reaction to any further escalation could feed back into the consumer goods and transportation cost story that Moore identified as the unpriced risk.
Energy-exposed consumer staples and freight names are the obvious pressure point if the Iran headline deteriorates further over the long weekend.
The bull case is clear: earnings are delivering, AI capex spend is accelerating, and the index-level bid has been sticky enough to absorb repeated geopolitical shocks since March. The counter is equally clear — this market has bought a resolution it doesn’t have yet, and it is entering a weekend with an active conflict and an unsigned deal. That’s a gap risk the futures market is pricing as small this morning, but small isn’t zero.
What’s on the Calendar to Close Out Friday
Friday is the final session of May, with two data prints traders are watching before the close, per CNBC:
- April preliminary wholesale inventories — relevant for supply-chain and inventory-cycle reads across industrials and consumer staples
- May Chicago PMI — a regional manufacturing and non-manufacturing read; a print below 50 would add to the softening-demand narrative already surfacing in discretionary retail numbers
Fashion retailer Buckle reports earnings before the opening bell. Given American Eagle’s after-hours miss, the market will be watching whether the weakness in the AE comparable-sales print is company-specific or a read-across to the broader mid-market apparel space.
For broader calendar context, the Investing.com economic calendar has the full schedule of upcoming macro releases.
| Asset / Index | Thursday Close Move | Weekly Gain (as of Thursday) | May Gain (pace) |
|---|---|---|---|
| S&P 500 (SPX) | +0.58% (new closing record) | +1%+ | ~5% |
| Nasdaq Composite | +0.91% (new closing record) | +2%+ | ~8% |
| Dow Jones (DJIA) | +0.05% (new closing record) | <1% | ~2% |
| NQ1! (Futures) | — | — | -0.16% pre-market |
| ES1! (Futures) | — | — | Near flat pre-market |
Sources: CNBC, Investing.com
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