US Markets Reach Record Highs as AI Optimism Offsets Geopolitical and Inflation Concerns

index Update

US equities closed at record highs on Friday, supported by continued strength in AI-related stocks and easing concerns over Middle East oil Supply disruptions. The S&P 500 and Nasdaq gained 0.2%, while the Dow Jones rose 0.7%, with monthly gains of more than 8% for the Nasdaq, 5% for the S&P 500, and 3% for the Dow. Market sentiment improved after reports suggested the US and Iran had reached a preliminary 60-day agreement to extend the ceasefire and begin restoring shipping through the Strait of Hormuz, contributing to lower oil prices and bond yields. Technology stocks led gains, with Microsoft, Oracle, and Dell advancing strongly on optimism surrounding AI investments and Demand.

Market Movers

Among the top-performing stocks of the session PRF Technologies Ltd. surged 118.98%, while Replimune Group, Inc. rallied 85.68%. On the losing side, Intercont (Cayman) Limited. fell 28.09%, while Cuprina Holdings (Cayman) Limited. declined 27.27%, making them the weakest performers during the trading day.

Commodities Update

Commodity markets rebounded on Monday amid ongoing geopolitical uncertainty in the Middle East. WTI and Brent Crude oil prices surged more than 3% to above $90 and $93 per barrel, respectively, as negotiations between the US and Iran over extending a ceasefire and reopening the Strait of Hormuz showed limited progress, while additional supply concerns emerged from Ukrainian attacks on Russian refineries and Russia’s temporary jet fuel export ban. Meanwhile, gold and silver steadied above $4,500 and $75 per ounce, respectively, as investors weighed persistent geopolitical risks against Inflation concerns stemming from elevated energy prices. Market Participants are also closely monitoring upcoming US labor market data for further clues on the Federal Reserve’s Interest Rate outlook.

Macro Updates

The US Dollar Index rose above 99 on Monday, ending a two-session decline as ongoing uncertainty over a potential long-term US-Iran ceasefire agreement supported demand for the greenback. Investors remained focused on developments surrounding the Strait of Hormuz negotiations and the upcoming US nonfarm payrolls report, which could provide further insight into labor market conditions and the Federal Reserve’s policy trajectory. Markets have increasingly shifted toward pricing in the possibility of a Fed rate hike later this year following signs of accelerating inflation.

Bonds Commentary

The US 10-year Treasury Yield rose to around 4.47% on Monday, rebounding from recent three-week lows as uncertainty surrounding a potential long-term US-Iran ceasefire agreement supported a cautious market stance. Investors also focused on the upcoming US nonfarm payrolls report for further clues on labor market strength and the Federal Reserve’s policy outlook. Expectations for Monetary Policy have shifted notably in recent weeks, with markets increasingly pricing in the possibility of a Fed rate hike later this year amid accelerating inflation pressures.

Futures Update

US Equity futures climbed to fresh record highs on Monday, with contracts linked to the S&P 500, Nasdaq 100, and Dow Jones rising around 0.5%, driven primarily by continued strength in the technology sector. Nvidia gained more than 2% in premarket trading after unveiling its RTX Spark Superchip for the PC market, boosting sentiment across software and hyperscaler stocks, with Microsoft and Oracle advancing roughly 4% each. Meanwhile, AMD and Intel fell about 5% amid increased competitive pressure. Broader market gains were more restrained as investors monitored rising oil prices and ongoing uncertainty surrounding US-Iran negotiations. Berkshire Hathaway traded largely unchanged following its announced $6.8 billion Acquisition of Taylor Morrison.

The S&P 500 remains firmly bullish, closing at a fresh record high of 7,580.05 (+0.22%) and holding comfortably above both the 21-day EMA (7,389) and 50-day EMA (7,186). The index continues its strong May–June advance, although a pullback from the session high of 7,599 suggests some profit-taking near record levels. Volume surged to one of the highest levels in recent weeks, signaling either strong institutional buying or the early signs of distribution. Meanwhile, RSI at 73.53 remains in overbought territory, confirming strong momentum but also increasing the likelihood of a short-term consolidation or pullback. Overall, the primary trend remains decisively bullish, though traders should monitor for signs of momentum exhaustion after the extended rally.