US Market Update: AI Rebound Supports Equities as Geopolitical Risks and Fed Caution Shape Sentiment

index Update

The Nasdaq advanced 0.9% and the S&P 500 rose 0.3% on Monday, led by a recovery in semiconductor stocks and renewed AI-driven optimism. Sentiment improved as Iran and Israel reportedly paused strike exchanges, easing oil-price pressures, while Nvidia, Broadcom, AMD, Micron, and Tesla gained strongly. However, the Dow slipped 81 points, dragged lower by Apple, Microsoft, and Visa.

Market Movers

Among the top-performing stocks of the session SUNation Energy, Inc. surged 420.35%, while Texxon Holding Limited. rallied 283.72%. On the losing side, Indaptus Therapeutics, Inc. fell 42.62%, while Intercont (Cayman) Limited. declined 37.56%, making them the weakest performers during the trading day.

Commodities Update

Gold and silver edged higher on Tuesday as the Iran-Israel ceasefire eased fears of broader conflict and energy-led Inflation risks, while President Trump indicated negotiations were progressing. However, both metals remained under pressure near multi-month lows as a stronger dollar and rising Treasury yields, driven by robust US jobs data, reinforced expectations of a possible Fed rate hike by December. Investors now await US CPI and PPI data for further policy direction.
Crude and Brent oil prices fell on Tuesday as Iran and Israel agreed to halt attacks, raising hopes for peace talks and easing escalation fears. However, Supply risks remain elevated as the Strait of Hormuz stays effectively closed, disrupting global crude, fuel, and Natural Gas shipments.

Macro Updates

US Small Business Optimism Weakens in May 2026

US small business optimism declined to 95.3 in May 2026, its lowest level since October 2024, as fuel-price Volatility, taxes, inflation, and supply chain disruptions weighed on sentiment. Tax concerns rose to 19%, followed by inflation at 18%, while 70% of firms reported supply chain impacts. Capital spending plans fell to their weakest level since 2009, even as price pressures intensified, with more businesses raising and planning to raise selling prices.

Dollar Pulls Back as Safe-Haven Demand Eases

The dollar index slipped below 100 on Tuesday as the Iran-Israel halt in attacks reduced safe-haven demand. However, the greenback stayed near multi-month highs as strong US jobs data reinforced expectations of a possible Fed rate hike by December, while investors awaited CPI and PPI data for further policy cues.

Bonds Commentary

The 10-year US Treasury Yield stayed near 4.57% on Tuesday as strong jobs data increased expectations of a possible Fed rate hike by year-end, while investors awaited CPI and PPI data for further policy signals. Oil-price weakness after the Iran-Israel halt in attacks helped ease inflation concerns.

Futures Update

US stock futures rose Tuesday as easing energy prices, firmer Treasuries, and renewed momentum in AI infrastructure stocks supported sentiment. S&P 500 and Nasdaq 100 futures gained around 0.5%, while Dow futures climbed 150 points, with Nvidia, Micron, and Oracle advancing ahead of key inflation data and Earnings.

Stocks staged a solid rebound at the start of Monday’s session following Friday’s decline, but buying momentum faded as the day progressed. The major indices retreated significantly from their intraday highs, with the Dow Jones Industrial Average slipping into negative territory by the close. On the Daily Chart, the S&P 500 has eased back toward the 7,405 level after reaching recent highs near 7,600. The index is now testing support around its rising 20-day Moving Average, while the RSI has cooled from previously overbought readings above 80. Trading Volume increased notably during the recent pullback, indicating heightened profit-taking activity. Despite the near-term weakness, the broader bullish trend that began from the April lows around 6,300 remains firmly in place, provided the index continues to hold above the key 7,200–7,300 support region.