Wall Street closes at record highs as oil eases and US hiring surges

NEW YORK, May 5 — US stock markets closed at fresh record highs on Tuesday after a sharp pullback in oil prices and another wave of better-than-expected earnings reasserted Wall Street's ability to look past the Iran war.

The S&P 500 rose 0.8 per cent to 7,259.22, surpassing its previous all-time high set last week. The Nasdaq composite gained 1.0 per cent to 25,326.13 and the Dow Jones Industrial Average added 356 points, or 0.7 per cent, to 49,298.25, the Associated Press reported. Brent crude, which had spiked above $115 a barrel on Monday after Iran's missile and drone attack on the United Arab Emirates, fell 4 per cent to $109.87. The drop eased the inflation fears that had unsettled global bond markets.

"This has been a 'why ask why' market," Scott Wren, senior global market strategist at Wells Fargo Investment Institute, said in a note. "You just have to go with it."

Earnings carry the day

Beneath the index moves was the more durable story. Corporate earnings for the first three months of 2026 have continued to top expectations even with oil at multi-year highs. DuPont jumped 8.4 per cent after the chemical maker reported a Q1 profit beat and raised its full-year forecast, despite acknowledging logistical disruption to its water technologies division from the Middle East war. American Electric Power Company added 1.8 per cent, and Cummins climbed 2.8 per cent, both on stronger-than-expected quarterly results.

Pinterest jumped 6.9 per cent after the bulletin-board operator reported an 11 per cent year-on-year increase in monthly active users to 631 million and beat first-quarter sales and profit forecasts. Anheuser-Busch InBev's US-listed shares rose 8.7 per cent on a profit beat. The company credited growth for the Corona, Stella Artois and Michelob Ultra brands outside their home markets. "Cheers to beer," chief executive Michel Doukeris said on the earnings call.

Palantir Technologies, by contrast, fell 6.9 per cent despite topping its own quarterly forecast. It was the latest reminder that even strong results are no longer enough for software stocks that more than doubled in each of the past three years.

A surprisingly strong labour market

The day's economic data added to the optimism. The Bureau of Labor Statistics' Job Openings and Labor Turnover Survey showed employers hired 5.55 million people in March. That was an increase of 655,000 from February and the largest monthly hiring jump in two years. The hires rate, which expresses new hires as a share of total employment, climbed to 3.5 per cent, its highest reading since May 2024. The quits rate ticked up by 125,000, a small but meaningful sign that workers feel confident enough about other prospects to leave their current jobs voluntarily.

Cyclical sectors led the surge. Hiring rates in transportation, warehousing and utilities rose 1.5 percentage points. Professional and business services rose 0.8 points. Accommodation and food services rose 0.8 points. The figures push back against months of soft headline payroll growth. As Axios's economic correspondent put it, the recent narrative of labour-market doom and gloom may have been overstated.

The Friday non-farm payroll release will be the next test. The unemployment rate has stayed within a narrow band of 4.3 to 4.5 per cent for nine consecutive months.

Bonds, the dollar and a wider trade gap

Treasury yields eased on the data and the oil pullback. The yield on the 10-year note fell to 4.42 per cent from 4.45 per cent late Monday. That is still well above the 3.97 per cent level that prevailed before the war began on February 28, a jump that has lifted mortgage costs and the cost of corporate borrowing.

Separately, the Commerce Department reported that the US trade deficit widened by 4.4 per cent to $60.3 billion in March. An artificial-intelligence-led capital-goods import boom outweighed a record month for goods exports. Capital-goods imports hit an all-time high of $120.7 billion, while goods exports rose to a record $213.5 billion, with petroleum a notable driver. Trade subtracted 1.30 percentage points from first-quarter GDP growth, which the Bureau of Economic Analysis put at an annualised 2.0 per cent.

Asia and Europe split

Stock markets abroad were mixed. Paris's CAC 40 rose 1.1 per cent, but London's FTSE 100 fell 1.4 per cent on profit warnings from HSBC and weakness in basic-resources stocks. Many Asian markets were closed for holidays, while Hong Kong's Hang Seng fell 0.8 per cent. Australia's S&P/ASX 200 slipped 0.2 per cent after the Reserve Bank of Australia raised its benchmark cash rate to 4.35 per cent, citing the inflationary impact of higher fuel and commodity prices since the war began.

The takeaway

For all the geopolitical noise, the underlying corporate and labour-market data are telling Wall Street the US economy is firmer than the headlines suggest. The risk, as Wren and others noted, is that the resilience itself becomes a reason for the Federal Reserve to keep rates higher for longer. For now, traders are content to bank the records.