Stocks rose on Wednesday as market participants continued to headline watch for any further developments surrounding the United States-Israeli war on Iran and its potential economic impacts.
The Dow Jones Industrial Average (NYSE: DIA) climbed nearly 240 points to settle at 48,739.41 on Wednesday, while the S&P 500 Index (NYSE: SPY) added 0.8% and the tech-heavy Nasdaq Composite (NASDAQ: QQQ) advanced 1.3% to end the session at 6,869.50 and 22,807.48, respectively.
A series of better-than-expected economic reports also helped uplift market sentiment on Wednesday.
U.S. private employers added a seasonally adjusted 63,000 positions in February, payroll processing firm ADP reported Wednesday, improving from January's downwardly revised print of 11,000. Separately, the U.S. services sector showed strong gains in February, the Institute for Supply Management reported Wednesday. The ISM services index rose 2.3 points from January to 56.1, representing the percentage of companies reporting growth.
Elsewhere, U.S. Treasury Secretary Scott Bessent told CNBC on Wednesday that the U.S. plans to make "a series of announcements" to support the export of oil through the Persian Gulf. The comment comes after President Donald Trump said Tuesday that the U.S. Navy will escort oil tankers through the Strait of Hormuz, if necessary.
Goldman Sachs economists warned that the U.S.-Israeli war on Iran could raise inflation if the conflict lasts longer than the at least "four to five weeks" estimated by Trump.
The firm's baseline scenario show the impact on energy prices could raise the consumer price index to 2.7% in May from its current level of 2.4% seen in January, the economists wrote in a note. However, the firm noted that price pressures could ease to 2% by the end of the year, which would meet the Federal Reserve's target rate needed to support a healthy economy.
In a more long-term oil price spike, headline CPI could raise to 3% in May and would "remain elevated relative to our baseline forecast for the remainder of the year," the economists wrote.
Looking ahead, market participants will remain focused on developments out in the Middle East on Thursday, alongside earnings reports from companies including Broadcom (NASDAQ: AVGO), Kroger (NYSE: KR), Costco Wholesale (NASDAQ: COST), Alibaba (NYSE: BABA) and Marvell Technology (NASDAQ: MRVL).