US open: Dow eyes record high as Middle East tensions fade
US stocks opened higher on Thursday as the US seemingly took steps to avoid further conflict in the Middle East, helping the Dow in its chase to record yet another all-time high.
As of 1540 GMT, the Dow Jones Industrial Average was up 0.43% at 28,869.67, while the S&P 500 was 0.45% firmer at 3,267.53 and the Nasdaq Composite came out the gate 0.74% stronger at 9,197.11.
The Dow opened 124.58 points higher on Thursday after closing out the previous session in the green despite news that Iran had fired rockets at two Iraqi bases hosting American troops.
As far as Thursday was concerned, market focus was still largely attuned to geopolitical developments after Donald Trump said late on Wednesday that Tehran was seemingly "standing down" following the attack on the Ain al-Asad airbase in retaliation for the death of Iranian General Qasem Soleimani.
Trump vowed to impose "additional punishing economic sanctions" on the Iranian regime but also indicated that Washington would be open to negotiations with the Islamic Republic.
"We must all work together toward making a deal with Iran that makes the world a safer and more peaceful place," Trump said.
Oanda analyst Craig Erlam said: "The conflict between the US and Iran appears to have ended as quickly and unexpectedly as it began. I'm sure many will be left confused by the events of the last week but at the time of writing, it seems clear that neither side currently wants an escalation of the conflict and exited at the first opportunity, while doing their best to save face.
"I guess it's back to talking about the other major issues that have dominated markets in recent months, including the trade deal between the US and China, which will be signed next week. China confirmed that Vice Premier Liu He will be in Washington to sign the agreement and mark the first major de-escalation in the trade war."
However, senior commander Abdollah Araghi of Iran's Revolutionary Guards later threatened that his nation would soon extract "harsher revenge", according to Reuters.
On the data front, the number of people claiming unemployment claims for the first time fell by more than expected during the last week, returning to the underlying trend that was in place before a Christmas induced jump due to the difficulty of adjusting for seasonal quirks in the data, economists said.
According to the US Department of Labor, initial jobless claims dropped by 9,000 over the week ending on 4 January in comparison to the previous week to reach 214,000. Analysts had forecast a reading of 220,000.
Investors were also keeping a keen eye on a bevy of speeches from policymakers at the Fed throughout the day - including Minneapolis Fed President Neel Kashkari, New York Fed President John Williams, Richmond Fed President Tom Barkin, Chicago Fed President Charles Evans and St Louis Fed President James Bullard.
In corporate news, Kohl's was down after issuing earnings guidance at the lower end of previous forecasts, while Bed, Bath & Beyond shares slipped more than 14% on the back of a revelation that it was denying the shuttering of more than 20 stores until fiscal 2020.
AMD shares were up after analysts at Mizuho Securities upgraded the chipmaker to 'buy' from 'neutral', while Goldman Sachs picked up 1.6% in early trade after Bank of America made the same upgrade.