Ceasefire Maintained, Service Metrics 'Satisfactory'... U.S. Stock Market Hits Record High Again, What Does It Indicate?

On May 5 in New York (early hours of May 6 KST), U.S. equity markets extended their record-high rally, supported by the continuation of the U.S.–Iran ceasefire, falling oil prices, and robust corporate earnings. The S&P 500 rose 0.8% to 7,259.22, and the Nasdaq advanced 1.0%, both marking new highs. The Dow Jones Industrial Average climbed 0.7%, while the Russell 2000 small-cap index surged 1.8%, reflecting broad-based risk-on sentiment.

April’s ISM Services PMI registered 53.6—slightly below the 53.7 consensus and March’s 54.0—but remained firmly in expansion territory above the 50-point threshold. Among its subcomponents, new orders and employment decelerated, yet the prices index held at a high 70.7, underscoring a “moderating growth but persistent price pressure” backdrop. Likewise, April’s JOLTS job openings hovered around 6.9 million, little changed from March, reinforcing the view of a gradually cooling labor market. Investors are increasingly favoring a “soft landing amid prolonged high rates” scenario over expectations of an early rate cut.

With economic readings neither too hot nor too cold, the U.S. 10-year Treasury yield dipped into the mid-4% range, diminishing hopes for further Fed rate hikes. Technology, semiconductors, and other cyclical sectors outperformed, while energy stocks lagged after WTI crude prices fell over 2% as Middle East shipping-lane tensions eased.

On the corporate front, DuPont exceeded Q1 earnings expectations and raised its full-year guidance, bolstering sentiment across materials and industrials. AI and data plays such as Palantir, along with memory-chip leader Micron, delivered strong revenue growth and sharp share-price gains, fueling momentum. Looking ahead, after-market reports from major tech firms including AMD are expected to sustain the sector’s strength.

In sum, with the U.S.–Iran ceasefire holding and oil prices retracing some of their earlier spike, geopolitical risks have softened. Nevertheless, given still-elevated service inflation and oil price levels, investors should watch upcoming employment data and energy market developments closely. Any shifts could prompt a reevaluation of the inflation and interest-rate outlook and amplify market volatility.