Expectations of a US-Iran ceasefire boost global stock markets; Japanese and Korean stock indices hit new highs; oil prices come under pressure; gold rises while silver falls.

Expectations of a US-Iran ceasefire boost global stock markets; Japanese and Korean stock indices hit new highs; oil prices come under pressure; gold rises while silver falls.

The US and Iran are close to reaching a ceasefire agreement, combined with a strong surge in technology stocks, driving global stock markets to historic highs. The MSCI Global Index rose 0.4%, setting a new record; oil prices fell back.

On Friday, US stock futures rose slightly. The S&P 500 is on track for its ninth consecutive weekly gain, a winning streak that has only happened four times since 1985. European stocks opened higher, Asian markets mostly rose, and Japanese and Korean indexes hit new highs. US treasuries maintained overnight gains, and the dollar was stable. In commodities, concerns over energy supply disruptions have eased, leading to lower oil prices. Inflation worries are temporarily subdued, spot gold rose 0.55% to $4,520.

The technology sector remains the market focus. Dell Technologies surged nearly 40% in pre-market trading due to optimistic sales prospects. AI-driven gains have pushed global equities higher, while expectations of an extended ceasefire further boosted the rally. Since the outbreak of the conflict, shipping through the Strait of Hormuz has been restricted, limiting oil transport and increasing inflationary pressures. Traders are closely watching for signs of its possible reopening.

In geopolitics, the US and Iran are close to a historic 60-day ceasefire and sea corridor unblocking agreement. According to Xinhua, American officials stated negotiators reached basic consensus on memorandum terms on the 26th, awaiting approval from senior leaders on both sides. Iran said it has gained necessary approval and is ready to sign. “The President expressed to mediators his intention to take a few days to consider the matter.” Meanwhile, according to CCTV News, Iran stated as of now, it has not agreed to any memorandum of understanding, nor confirmed approval to Pakistani mediators.

Senior strategistLouis Navellier said, “Even a 60-day agreement allowing the resumption of traffic through the strait should trigger a rebound, as severe supply disruption is rapidly approaching.”

Key market moves are as follows:

S&P 500 futures rose 0.13%; Nasdaq 100 futures rose 0.09%.

Euro Stoxx 50 opened up 0.2%; Germany's DAX up 0.1%; UK's FTSE 100 up 0.1%; France's CAC 40 up 0.4%.

Nikkei 225 closed up 2.5% at 66329.50, a record high. TOPIX closed up 1.4% at 3957.17. Korea's Kospi Index closed up 3.6% at 8476.15, a record high.

10-year US Treasury yield held steady at 4.44%.

Bloomberg Dollar Spot Index changed little; USD/JPY held at 159.30.

Brent crude fell 0.8% to $91.95/barrel; WTI crude fell 1%; spot gold rose 0.55% to $4,520, spot silver fell 0.3%.

Bitcoin rose 0.1% to $73,569.87. Ethereum price was little changed at $2011.04.

Dual drivers: technology and geopolitics, US stock futures rise moderately

Boosted by gains in technology stocks and easing geopolitical risks, US stock futures edged higher, with Nasdaq 100 futures up 0.09%. Dell shares soared 38% in pre-market trade. The company’s May 28 earnings report showed revenue of $43.8 billion, surpassing the most optimistic analyst estimate by 21%; Non-GAAP EPS of $4.86, 66% above the most optimistic estimate; the midpoint of full-year revenue guidance raised directly from the market consensus of $44 billion to $67 billion, an increase of about $3 billion.

Meanwhile, rising energy costs are increasing price pressures, sparking concerns that the Federal Reserve may be forced to raise rates. Due to inflationary pressures from war dampening incomes and pushing savings rates to a nearly four-year low, US consumer spending in April only saw a slight increase.

Nipun Capital’s Pooja Malik commented: “The market is looking for a reason to keep rising. Given crowded positioning and rising inflation and rate hike risks, even minor sentiment shifts could quickly trigger unwinding of trades.”

Japan and Korea stock markets collectively hit new highs

The Nikkei 225 closed up 2.5% at 66,329.50, setting a record closing high. TOPIX closed up 1.4% at 3957.17. SoftBank Group rose 6%. Market analysts believe OpenAI’s IPO and $40 billion refinancing became catalysts for its stock surge.

Korea’s Kospi Index closed up 3.6% at 8476.15, a record. Samsung Electronics rose 6%. News reports say Samsung has started delivering industry’s first 12-layer HBM4E samples to major global clients.

Geopolitical easing pressures oil prices, gold edges higher

Oil prices came under pressure from expected easing in geopolitical risks. Brent crude fell 0.8% to $91.95/barrel, with May losses over 18%, on course for the biggest monthly drop since March 2020.

Spot gold rebounded slightly, up 0.5% and hovering around $4,515 per ounce, but gold posted three straight months of losses, the longest losing streak since October 2022.

Gold volatility has increased recently, but some institutions say the long-term bullish case remains intact. Doug Moglia, macro and market strategist at Rockefeller Global Investments, stated in a recent report that gold’s long-term bull structure remains intact, predicting prices to break $5,500 in 2027, and reach $8,000 by 2030, with overshoot scenarios possibly seeing $10,000.

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