Stocks Climb to Records as Truce Hopes Ease Oil Shock

U.S. stocks pushed to fresh all-time highs as reports of a tentative U.S.-Iran ceasefire extension helped ease fears of deeper energy-supply disruption, sending Treasury yields lower and taking some pressure off oil. The rally was broad enough to lift major indexes to records, with technology leading, though the macro backdrop remained mixed as inflation stayed elevated while first-quarter growth was revised lower.

Key Headlines & Market Movers:

US-Iran Deal Reports Drive Risk-On Move: Markets rallied after reports that the U.S. and Iran reached a tentative agreement to extend the ceasefire by 60 days and restart nuclear talks. The potential reopening of the Strait of Hormuz remains the key market variable, given its importance to global oil flows and inflation expectations. Officials stopped short of confirming a final deal, so investors are pricing relief but not full resolution.

• Inflation and Growth Data Complicate Fed Outlook: April PCE inflation matched annual expectations, while monthly readings came in slightly softer than feared, helping bonds rally and supporting equities. Still, inflation accelerated from March, personal income was flat, and first-quarter GDP was revised down to 1.6%, reinforcing a less comfortable mix of slower growth and sticky prices. That combination limits the Federal Reserve’s room to cut rates and keeps policy uncertainty elevated.

Corporate Earnings Add Momentum Beneath the Surface: Snowflake surged after a stronger outlook and a major multiyear AI-cloud agreement with Amazon, reinforcing investor enthusiasm around enterprise AI spending. Retailers including Kohl’s, Best Buy, Dollar Tree, and Hormel also rallied sharply, suggesting investors found enough evidence that consumers remain willing to spend selectively. Microsoft led gains among the megacap technology names, while rail stocks weakened after regulators paused review of the Union Pacific-Norfolk Southern merger.

S&P 500 Sector Performance

Looking Ahead

Markets will remain highly sensitive to confirmation or denial of the U.S.-Iran ceasefire extension, especially any concrete path toward reopening Hormuz and normalizing energy flows. Investors will also watch whether softer monthly inflation momentum can persist despite higher oil-linked price pressures, as the Fed is unlikely to regain flexibility without clearer evidence that inflation is cooling. Corporate guidance, particularly from AI-linked firms and consumer-facing companies, will be important in determining whether record stock prices are supported by earnings momentum or simply by geopolitical relief.

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