Here Are 3 Hot Things to Know About Stocks Right Now
- The S&P 500 closed at a record high Thursday, rebounding from a mid-day dip after President Trump hinted at a military strike against Iran in response to the shooting down of a U.S. drone over international waters.
- Oracle (ORCL - Get Report) rose after the enterprise software company topped analysts' earnings and revenue expectations for its fiscal fourth quarter, and said first-quarter profit likely would top forecasts. Oracle is Real Money's Stock of the Day.
- Tesla (TSLA - Get Report) shares fell after analysts at Goldman Sachs cut their price target on the stock while arguing that Wall Street demand forecasts for the clean-energy carmaker likely are too optimistic.
Wall Street Overview
The S&P 500 closed at a record high Thursday on Fed rate-cut hopes and as ominous warnings to Iran from President Trump sent oil prices climbing.
The S&P 500 closed up 0.95% to 2,954.18, beating its April 30 record. The Dow Jones Industrial Average climbed 249 points, or 0.94%, to 26,753.17. The Nasdaq was up 0.80%.
Oil prices rose sharply Thursday after the United States confirmed a naval surveillance drone was shot down over the Strait of Hormuz by an Iranian missile. Prices surged even more when Trump tweeted, "Iran made a very big mistake!"
Speaking to reporters about a possible U.S. response to Iran's actions, Trump, who maintained the drone was over international waters said, "You're going to find out." He also said the incident may not have been intentional.
"I think they made a mistake, and I'm not just talking the country made a mistake. I think that someone under the command of that country made a big mistake," Trump said, according to CNBC.
Brent crude was up 4.40% to $64.54 a barrel, while West Texas Intermediate crude rose 5.89% to $57.15 a barrel.
"The president's tweet sent oil another leg higher breaking it out of its short-term downtrend," said Phil Flynn, an analyst at Price Futures Group in Chicago. "The odds of a conflict [are] rising and if the fighting involves the Strait of Hormuz it could get very dangerous. Of course, the Fed and strong demand is helping as well."
The news sent oil stocks rising. The Energy Select Sector SPDR Fund (XLE) was up 2.2% with such companies as Exxon Mobil (XOM - Get Report) , Chevron (CVX - Get Report) , Marathon Petroleum (MPC - Get Report) , and Noble Energy (NBL - Get Report) all posting gains.
Investors also took heart after Fed Chairman Jerome Powell and his colleagues on the Federal Open Market Committee dropped a reference that they would be "patient" in monitoring incoming data in a statement Wednesday, following the central bank's decision to hold interest rates steady. The Fed instead said it would act "as appropriate" in order to sustain an economic expansion of nearly 10 years.
"Stocks' resilience in the face of growing U.S.-Iranian geopolitical tension is a stark reminder not to fight the Fed," said Alec Young, managing director of global markets research, FTSE Russell. "As the central bank's dovish messaging continues to drive interest rates lower, it's inoculating investors from other risks as the cost of capital and competition from bonds both fall. It will be interesting to see if this continues should next week's G20 meeting fail to live up to investors' lofty expectations for a US-China trade breakthrough."
Oracle (ORCL - Get Report) rose 8.2% to $56.99 after the enterprise software company topped analysts' earnings and revenue expectations for its fiscal fourth quarter, and said first-quarter profit likely would top forecasts. Oracle is Real Money's Stock of the Day.
Tesla (TSLA - Get Report) shares fell 3% to $219.62 after analysts at Goldman Sachs cut their price target on the stock while arguing that Wall Street demand forecasts for the clean-energy carmaker are likely too optimistic.
Shares of Darden Restaurants (DRI - Get Report) rebounded from early declines to gain 1.2% to $118.76 after the operator of Olive Garden, Longhorn Steakhouse and Cheddar's Scratch Chicken restaurant chains missed Wall Street's fourth-quarter earnings expectations.
In economic news, the Philadelphia Federal Reserve's manufacturing index fell to 0.3 in June from 16.6 in May, the lowest read since February, when the index fell to hit zero. Initial jobless claims, a rough way to measure layoffs, fell by 6,000 to 216,000 in the seven days ended June 15. Economists were expecting estimated new claims to total a seasonally adjusted 220,000.