S&P 500, Nasdaq Close at Records as Kospi Tops 6,200, Nears All-Time High

Hopes for a second round of U.S.-Iran talks lift stocks as optimism over an end to the war grows; S&P 500 closes above 7,000 for the first time

Nasdaq also tops 24,000 for a record high

Solid U.S. consumer spending fuels earnings optimism

Kospi rises on buying by institutions and foreign investors

U.S. stocks closed at record highs on July 15, even though the war between the U.S. and Iran has not fully ended. Hopes for an end to the conflict and better-than-expected corporate earnings drove the gains. Global investors appear to be shifting their focus from geopolitical risks centered on Iran to economic fundamentals supported by corporate earnings.

South Korean stocks also extended gains for a third straight session. The Kospi, which broke above 6,000 a day earlier, topped 6,200 within a day and moved to the brink of a fresh all-time high.

Goldman Sachs, BofA Deliver Surprise Earnings

The S&P 500 rose 55.57 points, or 0.80%, to close at 7,022.95. It was the first close above 7,000 for the benchmark index. The tech-heavy Nasdaq Composite climbed 376.93 points, or 1.60%, to 24,016.02, setting a new record for the first time in about six months since Oct. 29.

News that a second round of talks between the U.S. and Iran on ending the war was nearing helped spark the rally. Investors, relieved of some wartime uncertainty, piled back into equities.

Expectations for strong first-quarter earnings also supported stocks as the reporting season began this week. Goldman Sachs, JPMorgan Chase and Citigroup had already posted results above forecasts through the previous day. Morgan Stanley and Bank of America, which reported on July 15, also beat market expectations.

Scott Ladner, chief investment officer at Horizon Investments, said the U.S. economy and corporate earnings remained fundamentally strong. He added that the market may be entering a sustained upswing.

U.S. Consumer Spending, AI Investment Remain Firm

Resilient U.S. consumer spending also helped revive investor sentiment, despite concerns that the war could fuel inflation. Bank of America said debit- and credit-card spending in March rose 4.3% from a year earlier, the biggest increase in three years. Spending at gas stations jumped 16.5%, while spending excluding that category still rose 3.6%. The data suggest consumers are maintaining their spending power.

Tax refunds are also supporting consumption. The average refund this year was $3,521, up 11.1% from a year earlier.

Investment in artificial intelligence is also underpinning the U.S. economy. Broadcom led gains in technology shares after news that the chipmaker had signed a deal with Meta to expand AI chip production sent the stock up 4.19%.

The Kospi closed up 2.21% at 6,226.05 on July 15. The benchmark reclaimed the 6,200 level for the first time in 33 trading days since Feb. 27, just before the war broke out. Institutional investors led the advance with net purchases of 1.1036 trillion won. They concentrated buying in blue chips including Samsung Electronics, which rose 3.08%, and Doosan Enerbility, which gained 6.33%. Foreign investors were also net buyers, purchasing 464.5 billion won for a third straight session.

Risks tied to the Iran war have not fully disappeared, given the number of variables still in play in the negotiations. The Federal Reserve said uncertainty stemming from the U.S.-Iran conflict was making it harder for U.S. companies to make decisions on hiring and investment. In its March Beige Book, released on July 15, the Fed said many companies were taking a wait-and-see approach.

Shin-young Park, New York correspondent / Hyun-ah Oh, reporter, Hankyung.com nyusos@hankyung.com