Amid hopes of a potential US-Iran peace deal and a rebound in the AI trade, signalled a third straight positive start for Wall Street on Friday, May 22. Futures tied to the benchmark S&P 500 rose 0.2%, while Dow Jones Industrial Average futures gained 124 points, or 0.25%. Nasdaq 100 futures were also up 0.27%.
Wall Street fluctuated widely this week as investors grappled with a sharp rise in long-term Treasury yields, while volatile crude oil prices also tested investor sentiment.
However, the S&P 500 was up 0.50% for the week and remained on track for an eighth straight weekly gain, shrugging off worries that severe disruptions to energy flows could stoke inflation.
If the index closes the week higher, it would mark its since 2023. Signs that neither Iran nor the US is looking to widen the conflict, along with growing appetite for a broader set of AI beneficiaries, have helped keep volatility in check despite often conflicting reports surrounding peace talks.
US Secretary of State reportedly said there were “some encouraging signs” surrounding a possible deal with Iran, adding that Pakistani mediators are expected to visit Tehran as Iranian officials review Washington’s latest proposal.
Meanwhile, Iran is reportedly discussing with Oman the possibility of setting up a permanent toll system that would formalise its control over maritime traffic through the energy chokepoint. US President Donald Trump said the US wants the strait to remain open and free of tolls.
On Thursday, Trump said that the US would eventually recover Iran’s stockpile of highly enriched uranium despite comments from Iran that it would not hand over the material.
Conflicting statements over the uranium stockpile, along with disagreements over tolls in the Strait of Hormuz, continued to cloud prospects for a breakthrough agreement.
Despite the gains in equity markets today, it is worth noting that this is not the first time optimism has emerged without any visible signs of progress in negotiations between the US and Iran.
In the bond market, the yield on the 10-year US Treasury note steadied around 4.57%, continuing to set the tone for borrowing costs across global markets.
Crude oil prices remain higher
remained higher, with Brent crude, the international oil benchmark, surging another $4 to the day’s high of $106 per barrel, although it remained lower for the week.
Brent had ended last week with an 8% jump and is now up nearly 73% so far this year. Before the start of the conflict in late February, Brent was trading around $70 per barrel.
Benchmark advanced $3 to the day’s high of $99.43 per barrel, though they are still down more than 3% for the week.
The correlation between oil prices and stock markets has also turned positive in recent weeks, meaning the two asset classes are now more likely to move in tandem rather than in opposite directions — a reversal from the trend seen through most of the conflict so far.
US stocks in focus today
Most megacap and growth stocks traded mixed in premarket trading. Nvidia inched up 0.2%, a day after the stock fell 1.7% despite delivering a robust quarterly forecast.
Semiconductor stocks also traded with modest gains, with , Marvell Technology, and Broadcom advancing between 0.3% and 1.7%.
Better-than-expected first-quarter performance pushed Workday shares up more than 9% in pre-market trade, while Estée Lauder surged 9.8% after the cosmetics maker and Spanish perfumery company Puig ended talks over a potential merger.
Take-Two Interactive added 4.3% after the video game company reiterated the November 19 launch date for the highly anticipated Grand Theft Auto VI, according to Reuters.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.