Global Markets Rally as Ceasefire Optimism Lifts Equities and Eases Inflation Concerns

index Update

The S&P 500 and Nasdaq reached fresh record highs, gaining 0.3% and 0.4% respectively, while the Dow Jones Industrial Average rose by 115 points. The rally was supported by optimism surrounding easing Middle East tensions following a 10-day ceasefire between Israel and Lebanon. Sectoral gains were led by energy, materials, and real estate, while healthcare and consumer discretionary lagged. On the corporate front, PepsiCo and Bank of New York Mellon advanced on strong Earnings, whereas Charles Schwab and Abbott Laboratories declined due to weaker results and guidance. Netflix also fell after issuing a softer Q2 outlook and announcing a Leadership transition.

Market Movers

On Thursday, the top gainers included Myseum, Inc., which surged 129.17%, and Psyence Biomedical Ltd., which rose 103.82%. Conversely, Texxon Holding Limited declined 44.96%, while Allbirds, Inc. dropped 35.79%, making them the top losers of the session.

Commodities Update

WTI crude traded near $91 per barrel and Brent hovered below $97, easing after sharp gains in the previous session as optimism over a potential US-Iran ceasefire reduced Supply concerns. While progress in negotiations, including a possible reopening of the Strait of Hormuz, has been indicated, confirmation from Iran remains pending and a full agreement could take time. Despite this, ongoing disruptions have significantly impacted global Supply, reshaping trade flows and pushing US crude exports to near-record levels.

Gold remained near $4,800 per ounce and silver around $79, both on track for a fourth consecutive weekly gain. Easing Inflation concerns, driven by declining oil prices and optimism over geopolitical developments, supported precious metals. Gold is up approximately 1% for the week and around 17% above its March low, while silver has gained about 4% this week and is nearly 30% higher than its March levels.

Macro Updates

Dollar Weakens on Easing Safe-Haven Demand Amid Ceasefire Optimism
The dollar index held above 98 but remained on track for a third consecutive weekly decline, as improving prospects of a US-Iran resolution reduced safe-haven Demand and eased Inflation concerns. Lower oil prices have further tempered expectations of additional monetary tightening. While policymakers highlighted persistent uncertainty, the broader outlook still points toward potential rate cuts over the longer term.

Bonds Commentary

The US 10-year Treasury Yield edged down to around 4.3%, supported by optimism over a potential US-Iran deal and easing geopolitical tensions. However, continued disruptions in the Strait of Hormuz have kept oil prices elevated above $90 per barrel, sustaining Inflation concerns. Consequently, market expectations have shifted, with investors now anticipating that the Federal Reserve will maintain interest rates at current levels through 2026.

Futures Update

US stock futures traded higher, signaling a continuation of the ongoing rally on Wall Street. Dow futures rose 0.3%, while S&P 500 and Nasdaq 100 futures gained around 0.2% each, putting all major indices on track for weekly gains amid easing geopolitical tensions.

Stocks fluctuated throughout Thursday's Trading session but largely maintained a positive bias before closing moderately higher. The Nasdaq and S&P 500 extended their strong recent gains, reaching new record closing highs. All major averages finished the day in positive territory, with the S&P 500 rising by 183.33 points, or 0.26%, to close at 7,041.29. From a technical standpoint, the index has hit an all-time high and shows a positive trend; however, there is a possibility of a mild correction in the near-term session. Additionally, the 14-period RSI is trending upward, though it is now in overbought territory—this doesn't signal an immediate Reversal but suggests caution, as a pause in upward momentum may occur. Immediate resistance is around 7,140, with support near 6,950.