US-Iran Peace Deal Lifts Risk Sentiment as Oil and Yields Retreat

Index Update

US stocks closed higher on Friday, supported by SpaceX’s strong Nasdaq debut and optimism over a potential US-Iran peace agreement. The S&P 500, Nasdaq, and Dow gained 0.5%, 0.3%, and 0.7%, respectively, while SpaceX surged 19% on its first trading day, lifting broader market sentiment despite mixed performance among major technology stocks.

Market Movers

Among the top-performing stocks of the session Cuprina Holdings (Cayman) Limited. surged 64.73%, while U-BX Technology Ltd. rallied 64.3%. On the losing side, Smith Micro Software, Inc. fell 36.81%, while Sadot Group Inc. declined 34.05%, making them the weakest performers during the trading day.

Commodities Update

Crude oil prices fell sharply on Monday, with WTI dropping more than 5% to around USD 80 per barrel and Brent declining over 4% toward USD 83 per barrel, reaching their lowest levels in two months. The selloff followed a reported US-Iran peace agreement aimed at ending the Middle East conflict and reopening the Strait of Hormuz, a critical route for roughly 20% of global oil shipments. The agreement includes the resumption of Persian Gulf oil exports, the lifting of certain US restrictions on Iranian ports, and provisions related to Iran’s nuclear program in exchange for economic incentives. Improved expectations for global oil supply and reduced geopolitical risk weighed heavily on crude prices.

Gold and silver advanced for a third straight session on Monday, supported by easing inflation concerns after the US-Iran peace agreement pushed oil prices to a two-month low. Gold rose above USD 4,300/oz, while silver moved toward USD 71/oz, as markets priced in reduced geopolitical risk and lower chances of rate hikes.

Macro Updates

The dollar index fell to around 99.5 on Monday as the US-Iran peace agreement reduced safe-haven demand and pushed oil prices lower, easing inflation and rate-hike concerns. Investors now await key central bank decisions, with the Fed, RBA, and BoE expected to hold rates steady, while the BoJ may raise rates to support the yen.

Bonds Commentary

The 10-year US Treasury yield fell to around 4.43% on Monday, its lowest level in a month, as the US-Iran peace agreement eased oil-driven inflation concerns and reduced expectations of tighter monetary policy. Investors now await key central bank decisions, with the Fed, RBA, and BoE expected to hold rates steady, while the BoJ may raise rates to support the yen.

Futures Update

US equity futures rallied on Monday as the US-Iran peace deal eased energy supply risks, pushed oil prices and bond yields lower, and improved risk sentiment. S&P 500, Nasdaq 100, and Dow futures rose 1.3%, 2%, and 1%, respectively, with technology and AI-linked stocks leading gains while defensive sectors lagged.

Stocks have traded in a choppy manner throughout Friday’s session, with the major averages fluctuating on either side of the flat line following Thursday’s strong advance. At present, the broader market is showing a mixed performance. The S&P 500 continues to exhibit a positive near-term technical setup, holding comfortably above both its 21-day and 50-day EMAs after successfully rebounding from support around the 7,200 level. The recovery has pushed the index back toward the 7,430 area, while the RSI has turned upward from near 40, indicating that short-term momentum is improving following the recent consolidation. Provided the index remains above the 21-day EMA, the outlook stays moderately bullish, with scope for a move back toward the recent highs in the 7,550–7,600 range. Conversely, a decline below 7,200 would signal the first meaningful deterioration in momentum.