The S&P 500 held near record highs on Thursday as investors welcomed a ceasefire agreement between Israel and Lebanon, easing geopolitical tensions that had weighed on global markets. The benchmark index rose 0.3% to 5,248, building on its 10% year-to-date gain.
Analysts noted that the ceasefire removed a key uncertainty for energy markets and reduced the risk of broader regional conflict. “The de-escalation is clearly being viewed as a positive for risk assets,” said a senior strategist at Goldman Sachs, speaking on condition of anonymity due to company policy. “We’re seeing flows rotate back into cyclical sectors that had underperformed during the tensions.”
The market’s resilience comes despite lingering concerns about inflation and the Federal Reserve’s policy path. Recent economic data has shown persistent price pressures, with core PCE inflation running at 2.8% annually – above the Fed’s 2% target.
Looking ahead, traders will focus on Friday’s nonfarm payrolls report for further clues about the economy’s strength. “The market has priced in a soft landing scenario,” noted Bank of America’s head of US equity strategy. “Any significant deviation from expectations could test this rally’s durability.”