US Markets Rally to Record Highs as Iran Deal Hopes Ease Inflation Concerns

index Update

US Equity markets closed at fresh record highs on Tuesday, supported by strong corporate Earnings and a sharp decline in oil prices that helped ease concerns surrounding inflationary pressures. The S&P 500 advanced 0.8%, while the Nasdaq climbed 1.2%, with both benchmarks reaching all-time highs. The Dow Jones Industrial Average also gained 0.8%. Investor sentiment improved after reports suggested that the ceasefire between Iran and regional forces remained intact despite recent attacks in the UAE. Economic indicators, including resilient JOLTS Job Openings data and stronger-than-expected ISM figures showing rising prices, reinforced expectations of a stable US economy while also supporting the Federal Reserve’s cautious policy outlook. Technology shares led the gains, with Intel surging 14% following reports of a potential processor Manufacturing Partnership with Apple. Micron added 11% after announcing shipments of its highest-capacity solid-state drives, while Amazon moved higher on logistics expansion initiatives. On the downside, Palantir declined 7% after underwhelming forward guidance, while AMD traded lower ahead of its quarterly Earnings Announcement.

Market Movers

Among notable gainers, Phoenix Asia Holdings Limited surged 168.51%, while Backblaze, Inc. advanced 63.58% during the session. Conversely, Embecta Corp. declined 57.84%, and SKK Holdings Limited fell 54.39%, making them the session’s weakest-performing stocks.

Commodities Update

Crude Oil prices recorded a sharp decline on Wednesday as easing geopolitical tensions between the US and Iran reduced concerns over Supply disruptions. WTI crude futures dropped more than 9% to below $93 per barrel, while Brent Crude fell over 8% to under $101 per barrel, extending losses from the prior session. Market sentiment improved after reports indicated that the US and Iran were nearing a preliminary agreement aimed at restarting broader nuclear negotiations. Expectations that the US could temporarily suspend military escort operations in the Strait of Hormuz further reduced fears surrounding supply constraints. However, despite improving diplomatic developments, elevated energy prices have already impacted global Demand, and shipping disruptions in the Persian Gulf are expected to take several weeks to normalize fully.

Meanwhile, precious metals rebounded strongly as lower oil prices eased Inflation concerns and improved investor sentiment. Gold rose above $4,700 an ounce for the second consecutive session, while silver surged more than 6% to above $77 an ounce, reaching its highest level since April 21. The gains followed reports that the White House was close to reaching a preliminary agreement with Iran involving enhanced UN inspections, restrictions on Iran’s nuclear activities, and gradual sanctions relief. Earlier comments from President Donald Trump indicating a pause in escalation plans also supported optimism across Commodity markets.

Macro Updates

US Dollar Weakens on Improving Geopolitical Sentiment

The US Dollar Index declined to 97.7 on Wednesday, returning to levels seen before the Iran conflict intensified. Growing optimism surrounding a potential diplomatic agreement between the US and Iran reduced safe-haven demand for the greenback. Reports suggesting progress toward broader nuclear negotiations, combined with the temporary suspension of “Project Freedom,” contributed to the decline in oil prices and eased inflation expectations. The softer inflation outlook pressured the dollar against major currencies, while the Japanese yen strengthened notably amid renewed speculation of possible intervention by Japanese authorities.

Higher Mortgage Rates Continue to Pressure Housing Demand

US mortgage activity declined for the second consecutive week in late April as rising borrowing costs weighed on housing demand. According to the Mortgage Bankers Association, the average 30-year fixed mortgage rate for conforming loans increased to 6.45% from 6.37% in the previous week. The rise followed higher Treasury yields amid geopolitical uncertainty, elevated energy prices, and concerns that the Federal Reserve may maintain a tighter Monetary Policy stance. Consequently, total mortgage applications declined 4.4% week over week, with refinance applications falling 5% and home purchase applications dropping 3.7%.

Bonds Commentary

The Yield on the US 10-year Treasury note declined around 7 basis points to 4.34% on Wednesday, extending the previous session’s decline as falling oil prices helped ease inflation concerns and increased demand for Government Bonds. Investor sentiment improved following reports that the US and Iran were nearing a preliminary agreement to end the conflict and resume broader nuclear negotiations. The reduction in oil prices lowered fears of renewed inflationary pressures, supporting Treasury prices and pushing yields lower. Market Participants are now awaiting the Treasury’s upcoming Refunding Announcement after revised estimates showed the US Treasury expects to borrow $189 billion during the second quarter, significantly above earlier projections.

Futures Update

US equity futures moved sharply higher on Wednesday as improving prospects for a diplomatic resolution between the US and Iran strengthened the broader macroeconomic outlook and supported risk appetite. Futures linked to the S&P 500 and Nasdaq 100 advanced 1% and 1.5%, respectively, reaching fresh record levels, while Dow futures climbed more than 500 points. Expectations that a preliminary memorandum between the US and Iran could restore trade flows through the Strait of Hormuz and ease energy-related inflation concerns further boosted sentiment. Technology and AI-related companies led the rally following strong earnings results. AMD surged 20% after reporting better-than-expected earnings and raising guidance on robust Data Center demand, while Super Micro Computer gained 15% following strong quarterly performance. The rally also lifted Nvidia, Sandisk, Micron, and Intel, all of which rose more than 3%, while Disney advanced 5% after posting strong Revenue growth.

After facing pressure in the previous session, stocks rebounded strongly on Tuesday, with both the Nasdaq and the S&P 500 Index fully recovering prior losses and closing at fresh record highs. Although the major indices eased slightly from intraday peaks, they still ended the session with solid gains, as the S&P 500 jumped 58.45 points, or 0.81%, to finish at 7,259.21. From a technical standpoint, the index remains firmly in a bullish trend, trading comfortably above its 21 EMA (~7055) and 50 EMA (~6923) following a sharp V-shaped recovery, signaling strong upward momentum; however, with RSI hovering near 74 in overbought territory and price stretched above short-term averages, the near-term outlook suggests potential consolidation or minor pullbacks toward the 7,200–7,100 range, favoring a buy-on-dips strategy, while 7,280–7,300 acts as immediate resistance and a drop below 7,200 could lead to short-term profit-taking.