Stocks Rally as War De-Escalation Hopes Lift Risk Appetite

Global equities rallied to record highs as hopes grew that the US and Iran were nearing a deal to end the war and reopen the Strait of Hormuz, easing fears around energy supply and inflation. The S&P 500 and Nasdaq reached fresh records, powered by tech and AI-linked shares, while oil fell sharply, Treasury yields declined, and the dollar weakened as markets priced in reduced geopolitical and inflation pressure.

Key Headlines & Market Movers:

• US-Iran Deal Hopes Drive Broad Risk Rally: Investors responded positively to reports that Washington and Tehran are moving toward a framework to end the conflict and reopen Hormuz. Oil’s sharp decline helped ease inflation concerns, while lower Treasury yields supported equity valuations and reinforced the move into risk assets.
• AI and Tech Earnings Momentum Push Indexes Higher: Chip and AI-linked stocks led the rally, with AMD surging on upbeat guidance and Super Micro Computer jumping after stronger margins and a constructive profit outlook. Nvidia also gained after announcing a broader AI infrastructure partnership with Corning, adding to optimism that AI-related capital spending remains a durable market driver.

Economic Data and Fed Commentary Keep Rates in Focus: Stronger April private payrolls suggested the labor market is stabilizing ahead of Friday’s jobs report, but Fed officials continued to flag uncertainty around inflation and policy. Treasury yields moved lower as geopolitical easing reduced pressure on energy-driven inflation, though policymakers appeared cautious about declaring victory too soon.

S&P 500 Sector Performance

Looking Ahead

Markets will focus on whether the US-Iran proposal turns into a durable de-escalation agreement, especially given the direct implications for oil prices, inflation expectations, and global risk appetite. Friday’s jobs report is the next major macro test, with investors watching whether labor-market resilience supports the soft-landing narrative or complicates expectations for the Fed’s next move.

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