Markets Rally as US-Iran Deal Eases Oil and Inflation Concerns Ahead of Fed Decision

Index Update

US stocks rallied Monday as a preliminary US-Iran agreement to reopen the Strait of Hormuz eased inflation concerns and pushed oil prices lower. The S&P 500, Dow and Nasdaq posted strong gains, led by tech and fuel-sensitive stocks, while SpaceX extended its post-IPO surge and Fox dropped on its planned Roku acquisition.

Market Movers

Among the top-performing stocks of the session Regentis Biomaterials Ltd. surged 526.67%, while FreeCast, Inc. rallied 141.94%. On the losing side, Elicio Therapeutics, Inc. fell 72.53%, while Comtech Telecommunications Corp. declined 42.96%, making them the weakest performers during the trading day.

Commodities Update

Crude oil prices extended losses for a fourth straight session on Tuesday, with WTI falling below USD 78 per barrel and Brent nearing USD 80, marking their lowest levels since early March. The decline was driven by expectations that a US-Iran interim agreement could reopen the Strait of Hormuz and restore supply flows, although uncertainty remains around implementation, shipping security and full reopening conditions.

Gold and silver extended gains on Tuesday, with gold trading above USD 4,300 per ounce and silver near USD 70, as easing US-Iran tensions reduced inflation fears tied to energy supply disruptions. However, investors remained cautious ahead of the expected interim deal signing in Switzerland and key central bank policy decisions, including the Federal Reserve’s first meeting under Kevin Warsh.

Macro Updates

US Private Job Growth Shows Signs of Cooling

US private job growth slowed for a fourth consecutive week, with employers adding an average of 25,500 jobs per week in the four weeks ended May 30, 2026, down from 29,000 previously, although ADP’s May report still showed a solid net gain of 122,000 jobs, the strongest increase since January 2025.

Dollar Stabilizes Ahead of Fed Decision

The dollar index steadied around 99.7 on Tuesday as investors shifted focus from the US-Iran peace deal to the Federal Reserve’s upcoming policy meeting, where rates are expected to remain unchanged under new Chair Kevin Warsh. While the peace agreement eased some geopolitical pressure, hotter inflation and upcoming decisions from major global central banks kept currency markets cautious.

Bonds Commentary

The US 10-year Treasury yield fell to 4.44% on Tuesday, its lowest level in nearly three weeks, as lower oil prices and easing inflation concerns increased bond demand. Investors also reduced rate-hike expectations ahead of the FOMC meeting, where the Fed is widely expected to keep rates unchanged while markets watch for updated projections and guidance under new Chair Kevin Warsh

Futures Update

US equity futures were largely flat on Tuesday, holding recent gains as optimism over a potential US-Iran deal and reopening of the Strait of Hormuz eased inflation concerns and pulled bond yields lower ahead of the Fed’s expected rate hold. Meanwhile, SpaceX extended its post-IPO rally on acquisition news, while major tech stocks saw mild premarket weakness after recent gains.

Following a strong start to the session, equities extended their gains throughout Monday's trading, with the major indices closing firmly higher and the Dow finishing at a fresh record high. The S&P 500 continues to exhibit a positive technical setup, trading near 7,554 and remaining well above both its 21-day EMA at 7,432 and 50-day EMA at 7,285. After successfully rebounding from a recent retracement toward the 50-day EMA, the index has regained upward momentum and is now challenging resistance around the 7,600 level. Technical indicators remain supportive, with the RSI climbing to approximately 60, reflecting healthy buying interest without signaling overbought conditions. Provided the index holds above the 7,500–7,520 support zone, pullbacks are likely to be viewed as buying opportunities, potentially paving the way for a move toward 7,580–7,600. However, a sustained decline below 7,500 may lead to a period of consolidation, with the 21-day EMA serving as the next key support area.