Markets Rally on Iran Deal Hopes as Oil Eases and Risk Sentiment Improves

Index Update;  U.S. equities closed higher, supported by easing oil prices and declining yields amid optimism that the U.S. and Iran may eventually reach a deal. The S&P 500 and Nasdaq 100 gained over 1%, driven by strong performance in software and application stocks, while the Dow rose more than 300 points. Gains came despite the U.S. imposing a blockade on Iranian oil shipments after failed weekend talks, as renewed signals of negotiations lifted sentiment. Oracle surged over 12%, with Palantir, CrowdStrike, and ServiceNow each rising more than 5%, while financial stocks were mixed ahead of earnings, with Goldman Sachs falling up to 4% after missing trading revenue estimates.

Market Movers:  On Monday, the top gainers were Real Messenger Corporation. (+475.08%) and Rectitude Holdings Ltd. (85.83%). On the contrary, Children's Place, Inc. (The). (-28.46%) and Skycorp Solar Group Limited. (-25.00%) declined the most the same day.

Commodities Update:  WTI and Brent crude oil prices eased to approximately $97 and $98 per barrel, respectively, as optimism surrounding a possible resumption of U.S.–Iran negotiations weighed on prices despite ongoing supply disruptions. Discussions may restart before the expiration of the current two-week ceasefire, following unsuccessful weekend talks that led to a U.S. blockade on Iranian oil shipments through the Strait of Hormuz. This development prompted Saudi Arabia to advocate for renewed diplomatic efforts. Although the conflict has damaged energy infrastructure and significantly curtailed shipping through the critical waterway, with OPEC+ reporting a sharp decline of 7.9 million barrels per day in output for March, the International Energy Agency cautioned that prolonged tensions could eliminate global oil demand growth this year, even as current prices may not fully reflect the extent of disruption. Gold and silver prices rebounded, with gold nearing $4,800 per ounce and silver rising above $77 per ounce, supported by improving sentiment linked to potential U.S.–Iran negotiations aimed at securing a longer-term ceasefire. Diplomatic signals from both sides, including outreach from Tehran following the U.S. naval blockade, contributed to the recovery, while easing oil prices helped moderate inflation concerns and reduced expectations of persistently high interest rates. Despite the rebound, both metals remain notably below levels seen at the onset of the conflict, with gold down approximately 10% and silver nearly 20%

Macro Updates

Dollar Weakens on Iran Deal Optimism and Easing Inflation Concerns

The dollar index hovered near six-week lows around 98.3 as improving risk sentiment, driven by renewed hopes of a U.S.–Iran agreement, reduced demand for safe-haven assets. While a weekend deal failed and the U.S. imposed a blockade on Iranian oil shipments, subsequent signals of resumed negotiations and potential reopening of the Strait of Hormuz weighed on oil prices, easing inflation concerns and softening expectations of prolonged tight Federal Reserve policy. Additionally, Fed Governor Stephen Miran indicated that the energy shock has not significantly impacted long-term inflation expectations, with price pressures likely to return to target within a year

Bonds Commentary:  The 10-year U.S. Treasury yield held near recent lows around 4.29% as optimism over renewed U.S.–Iran negotiations eased inflation concerns. Despite failed weekend talks and a U.S. blockade on Iranian oil shipments, signals of resumed discussions and a potential ceasefire, along with the possible reopening of the Strait of Hormuz, pressured oil prices and reduced expectations of prolonged tight Federal Reserve policy. Fed Governor Stephen Miran also noted that the energy shock has not significantly impacted long-term inflation expectations and expects inflation to return to target within a year.

Futures Update:  U.S. stock futures moved modestly higher, supported by optimism over potential progress in U.S.–Iran negotiations aimed at ending the conflict. However, a continued U.S. blockade of Iranian ports for a second day is disrupting oil flows through the Strait of Hormuz, keeping supply concerns in focus even as oil prices decline. Investors are also closely watching a wave of major U.S. bank earnings, while LVMH highlighted sales pressure linked to Middle East tensions. Dow futures rose 0.1%, S&P 500 futures gained 0.1%, and Nasdaq 100 futures advanced 0.3%.

After experiencing early pressure in the session, stocks regained ground throughout the trading day on Monday. The major averages recovered significantly from their lowest levels of the day, with both the Nasdaq and the S&P 500 moving into positive territory. Currently, the major averages are showing a mixed performance. The S&P 500 increased by 69.35 points, or 1.02%, closing at 6,886.24. The index has regained its key moving averages, which support a positive outlook and suggest the potential for further upward movement. The earnings season has begun, which may help drive prices higher. Additionally, the 14-period RSI is trending upward, further supporting a positive bias. Immediate resistance is seen around 6,920, with support near 6,770