US Markets Advance to Record Levels as Easing Geopolitical Risks Lift Investor Sentiment

index Update

US equities delivered a mixed performance on Tuesday, with the S&P 500 rising 0.6% and the Nasdaq gaining 1.2% to fresh record highs, while the Dow Jones slipped 118 points as investors monitored ongoing developments in the Middle East. Market sentiment remained supported by optimism that the US and Iran could still reach an agreement despite continued military tensions and mixed diplomatic signals. Technology, industrials, and materials sectors led gains, while energy and consumer staples lagged due to falling oil prices. Micron Technology surged 19.3% after a bullish UBS upgrade pushed its market Capitalization above $1 trillion for the first time, while Alphabet, Broadcom, and Tesla also advanced. In contrast, Nvidia edged lower alongside declines in Microsoft, Amazon, Exxon Mobil, and Walmart.

Market Movers

Among the top-performing stocks of the session VCI Global Limited. surged 118.05%, while Momentus Inc. rallied 109.76%. On the losing side, Enhanced Group Inc. fell 43.47%, while Corbus Pharmaceuticals Holdings, Inc. declined 30.31%, making them the weakest performers during the trading day.

Commodities Update

Commodity markets declined sharply on Wednesday as easing concerns over disruptions in the Strait of Hormuz improved risk sentiment and reduced fears of an energy-driven Inflation shock. WTI crude fell 6% to around $88.3 per barrel, while Brent dropped more than 4.5% below $95, after Iranian state television stated that Tehran aims to restore commercial shipping through the strait to pre-war levels within a month. Optimism surrounding ongoing indirect US-Iran talks and the resumption of tanker movements through the key energy corridor pressured oil prices, which are now down more than 16% in May after earlier conflict-driven gains. Meanwhile, gold slipped below $4,500 an ounce and silver declined under $76 an ounce as hopes for a potential peace agreement reduced safe-haven Demand, despite continued military tensions in the region and warnings from US officials that negotiations could still take several days to conclude.

Macro Updates

Rising Mortgage Rates Weigh on US Housing Demand

US mortgage activity weakened sharply in late May as borrowing costs climbed to their highest levels since August 2025 amid persistent inflation concerns and rising Treasury yields. The average 30-year fixed mortgage rate increased to 6.65% for the week ending May 22, marking the fifth consecutive weekly rise, as investors reduced expectations for Federal Reserve rate cuts and began pricing in the possibility of a rate hike later this year. Elevated fuel prices linked to Middle East tensions and concerns over growing global public Debt also contributed to higher long-term bond yields. As a result, total mortgage applications fell more than 8%, recording the steepest decline in nearly two months, while refinance applications dropped 18.1% and home purchase applications edged slightly lower.

Dollar Holds Steady as Markets Assess US-Iran Negotiations

The US Dollar Index hovered above the 99 mark on Wednesday after a volatile start to the week, as investors closely monitored developments surrounding a potential US-Iran peace agreement amid ongoing geopolitical tensions. President Donald Trump stated that negotiations to extend the ceasefire and reopen the Strait of Hormuz are continuing, although Secretary of State Marco Rubio warned that a final agreement could still take several days to materialize. Meanwhile, renewed military activity in the region, including reported US strikes in southern Iran and Iranian claims of targeting US aircraft and drones, kept markets cautious. At the same time, easing Treasury yields reflected reduced expectations for near-term Federal Reserve rate hikes, while investor attention shifted toward upcoming PCE inflation data for further guidance on the Fed’s policy outlook.

Bonds Commentary

The Yield on the US 10-year Treasury note fell to around 4.48% on Wednesday, its lowest level in nearly two weeks, as investors scaled back expectations for additional near-term Federal Reserve rate hikes amid optimism surrounding potential progress in US-Iran peace negotiations. Market sentiment improved after President Donald Trump said discussions to extend the ceasefire and reopen the Strait of Hormuz were continuing, although Secretary of State Marco Rubio warned that a final agreement could still take several days to complete. Despite lingering geopolitical tensions following reported US strikes in southern Iran and Iranian claims of targeting US military Assets, investors moved toward safer bonds while awaiting upcoming PCE inflation data for further clarity on the Fed’s policy outlook.

Futures Update

US Equity futures climbed to fresh record highs on Wednesday, supported by easing energy prices and continued strength in semiconductor and AI-linked stocks. Futures for the S&P 500, Nasdaq 100, and Dow Jones each gained around 0.4% as investors shifted focus back to expectations of a potential Middle East agreement that could restore GCC oil exports and reduce inflationary pressures. Lower energy prices also improved sentiment toward Treasury markets. Chipmakers led gains, with Micron surging 8% in premarket trading after strong analyst upgrades, adding to its sharp rally from the previous session. AI-related stocks also advanced, with Tesla rising 2.5% while Nvidia and Alphabet edged higher, whereas Salesforce traded slightly lower ahead of its quarterly Earnings release.

Technology stocks led Wall Street higher on Tuesday, driving the tech-heavy Nasdaq to another record closing high, while the S&P 500 also finished at fresh all-time highs. In contrast, the Dow Jones Industrial Average posted a modest decline. Technically, the S&P 500 continues to exhibit a strong bullish structure across both the intraday and short-term timeframes, with price action holding comfortably above the 21-day EMA (7,333) and 50-day EMA (7,139) as the index pushes through the 7,520 region. Momentum remains firmly tilted toward the bulls following the powerful April–May rebound, and the latest breakout extension points to continued institutional buying interest despite RSI remaining elevated near the 70 level. The market’s ability to sustain only shallow pullbacks while consistently forming higher lows highlights strong dip-buying activity, with immediate support now positioned around 7,450–7,470. Holding above this range keeps the broader uptrend intact and maintains the possibility of a further advance toward the 7,600 level and beyond in the near term.