Stocks finished higher Wednesday as investors assessed geopolitical developments in the Middle East. Overnight, volatility spiked as S&P 500 futures slid more than 1.5% following an Iranian missile attack on two U.S. military bases in Iraq. However, risk assets rebounded amid reports of no American casualties and an optimistic speech from President Trump. During the address he called for peace saying “Iran appears to be standing down” and that the U.S. will impose economic sanctions rather than military action. The Dow added 161 points. The S&P 500 advanced 0.5%, while the Nasdaq Composite jumped 0.7% and recorded fresh record highs.
Treasuries weakened, with the yield on the 10-year note adding four basis points to 1.86% after sliding as low as 1.70% overnight. In commodities, WTI crude tumbled 4.9% to $59.61/barrel amid the deescalating U.S.-Iranian tensions. COMEX gold lost 0.8% to $1,561.00/ounce after advancing to its highest level since 2013 overnight.
On the data front, the ADP employment report showed 202,000 private jobs were added to the U.S. economy in December, the most since April, while the prior figure was upwardly revised to 124,000 from an initial 67,000 print. Separately, mortgage applications jumped 13.5% in the most recent week.
In corporate news, Boeing fell 1.7% on news of a fatal 737-800 crash in Iran. Walgreens dropped 5.8% after missing estimates on both the top and bottom line. Elsewhere, Constellation Brands climbed 3.7% after the alcohol distributor posted a strong earnings report and boosting full year guidance.