Wall Street Extends Rally Amid US-Iran Negotiation Hopes and Easing Inflation Concerns

index Update

US stocks moved higher on Friday, supported by optimism surrounding progress in Middle East peace negotiations and continued strength in corporate Earnings. The S&P 500 gained 0.4%, extending its winning streak to eight consecutive weeks, while the Dow Jones rose 294 points to an intraday record high and the Nasdaq advanced 0.2%, marking its seventh weekly gain in eight weeks. Market sentiment improved after Secretary of State Marco Rubio indicated progress toward a potential US-Iran agreement, although Iranian officials cautioned that major differences still remain. Technology stocks also contributed to gains following strong results from China’s Lenovo Group, with Dell Technologies reaching a record high and HP Inc. surging more than 15%. Meanwhile, Estée Lauder climbed 11.9% after ending Merger discussions with Spanish perfumery company Puig, while Workday gained 5.2% after reporting better-than-expected first-quarter earnings.

Market Movers

Among the top-performing stocks of the session, rYojbaba Co., Ltd. surged 148.76%, while Hyliion Holdings Corp. rallied 42.62%. On the losing side, NervGen Pharma Corp. fell 43.48%, while Black Diamond Therapeutics, Inc. declined 35.77%, making them the weakest performers during the trading day.

Commodities Update

WTI and Brent Crude Oil Futures remained near five-week lows on Tuesday, with WTI trading below $93 per barrel and Brent around $99, as markets weighed optimism surrounding ongoing US-Iran negotiations against renewed US military operations targeting missile launch sites and vessels in southern Iran. President Donald Trump indicated that discussions with Tehran were progressing positively, although he warned of additional strikes if negotiations Fail. Reports suggest both countries are negotiating a temporary ceasefire extension that could lead to easing US restrictions and reopening the Strait of Hormuz. Meanwhile, gold slipped below $4,550 an ounce and silver fell below $77 an ounce, as investors continued to assess geopolitical risks and Inflation concerns tied to energy markets. Although both precious metals have declined sharply since the conflict began due to expectations of prolonged tighter Monetary Policy, the recent decline in oil prices has helped reduce fears of further inflationary pressure and additional Interest Rate hikes.

Macro Updates

The dollar index steadied above 99 on Tuesday after early-week weakness, as investors balanced ongoing US military operations in southern Iran with signs of progress in peace negotiations, keeping concerns around inflation and monetary policy elevated. Reports indicated that US forces targeted missile launch sites and vessels suspected of attempting to deploy mines that threatened American personnel, while President Trump stated that discussions with Tehran were advancing positively despite warning of further strikes if talks fail. A Pakistani mediator also reportedly indicated to China that an agreement could be near. The dollar had previously surged to a six-week high as markets increasingly priced in a Federal Reserve rate hike before year-end amid rising inflation concerns linked to higher energy prices. Investors are now awaiting upcoming PCE inflation data for further clarity on the Fed’s policy direction.

Bonds Commentary

The Yield on the US 10-year Treasury note declined around 6 basis points to 4.5% on Tuesday as investors cautiously monitored developments surrounding potential US-Iran negotiations despite continued military tensions and mixed signals from both sides. Market focus also remained on the Federal Reserve’s policy outlook, with investors reassessing interest rate expectations following the recent surge in oil prices and related inflation concerns. Traders are now pricing in an 80% probability of a rate hike by December, marking a sharp shift from earlier expectations for two 25-basis-point rate cuts before the escalation in US-Iran tensions. Attention is also turning toward the upcoming PCE inflation report, which is expected to provide additional insight into inflation trends and the Fed’s likely policy direction.

Futures Update

US Equity futures climbed to record highs on Tuesday ahead of the market open, driven by optimism over a potential US-Iran agreement that could restore energy trade through the Strait of Hormuz and help ease inflation concerns through lower oil prices. Futures linked to the S&P 500, Nasdaq 100, and Dow Jones rose more than 0.5%, maintaining gains despite renewed military strikes between US and Iranian forces that continued to cloud certainty around the negotiations. Strength in AI-related hyperscalers and compute infrastructure companies continued to support broader market sentiment, with Tesla, Nvidia, and Alphabet each rising around 1% in premarket trading. Eli Lilly also advanced 1.3% following acquisitions in the Vaccine space, while Melrose Industries declined 8% after authorities ordered precautionary evacuations at its GKN Facility.

Stocks rallied strongly through most of Friday’s session before trimming gains late in the day, though major indices still closed higher, with the Dow posting another record close. The S&P 500 remains firmly bullish near fresh highs around 7,473, holding well above the 21 EMA (7,315) and 50 EMA (7,123). Momentum stays strong after the breakout above 7,400, while RSI near 68 suggests bullish strength without extreme overbought conditions. As long as the index holds above the 7,400–7,350 support zone, pullbacks are likely to attract buyers and keep the uptrend intact.