U.S. stocks continued their upward trend on Thursday, with the S&P 500 hitting a record high and the Nasdaq Composite also setting a new record. The improved market sentiment was primarily driven by news from the Middle East: according to multiple reports, U.S. and Iranian negotiators have drafted a proposal for a 60-day arrangement, but the plan still requires Trump's approval.
US-Iran negotiation proposals revealed
The report states that the memorandum of understanding proposes to extend the ceasefire for 60 days initially to buy time for subsequent negotiations. The focus of discussion will initially be on Iran's nuclear program. The proposal also includes a statement that Iran is not seeking nuclear weapons, while the US will discuss sanctions relief and the release of some frozen Iranian funds.
The report also mentioned that the plan involves shipping arrangements in the Strait of Hormuz. Commercial shipping is intended to remain unimpeded for the 60-day period, and the intensity of the US maritime blockade may be reduced as shipping resumes. The document also includes mechanisms to help Iran receive supplies and humanitarian aid.
US stocks hit record highs
The Strait of Hormuz is a vital global energy transport route. Historically, whenever regional tensions arise, oil shipping and energy prices become the focus of market attention. Following the recent ceasefire proposal, investor expectations for de-escalation have increased, driving up US risk assets. However, whether the White House will formally approve the ceasefire remains the most closely watched variable.
- The S&P 500 rose approximately 0.5% on the day.
- The Nasdaq Composite Index rose approximately 0.6%.
- The Dow Jones Industrial Average rose slightly by 17 points.
As of press time, the S&P 500 was at 7564.28 points, up 0.58% on the day. On a weekly basis, the S&P 500 is on track for its ninth consecutive week of gains, which, if realized, would be the index's longest winning streak since 2023.
Goldman Sachs raises its target to 8000 points.
As the market rises, Goldman Sachs has raised its year-end 2026 target for the S&P 500 from 7,600 to 8,000. Following this adjustment, Goldman Sachs' year-end forecasts are roughly in line with those of Morgan Stanley and Deutsche Bank, with all institutions placing their targets around 8,000.
Goldman Sachs believes that AI infrastructure will remain a significant source of corporate profit growth. Their calculations show that by 2026, AI-related companies, such as semiconductor firms and cloud infrastructure providers, could contribute approximately half of the S&P 500's profit growth. Some strategists, however, continue to focus on the suppressive effects of US Treasury yields, economic growth, and Federal Reserve policies on stock market valuations.
Additional information:According to Kalshi's current forecast, the probability of the S&P 500 reaching 8,000 points within the year is about 60%.
