Global equity markets posted modest gains on Friday, with U.S. stocks holding near record levels, while oil prices extended their decline and were on track for a weekly loss. Traders are awaiting developments to see if the U.S. and Iran can finalize a peace deal and resume oil shipments through the Strait of Hormuz.
In Europe, the Stoxx 600 index rose 0.6%, erasing its losses for the week. Airline and travel stocks led the gains, while banking shares also advanced broadly across the continent. European bonds fluctuated between small gains and losses following higher inflation readings in France, Italy, and Spain, data that reinforced the case for interest rate hikes by the European Central Bank.
The MSCI All-Country World Index gained 0.4%, reaching a new all-time high. The rally was primarily driven by semiconductor stocks. Earlier, Dell's upgraded earnings outlook further boosted market optimism around the artificial intelligence theme, propelling Japan's Nikkei 225 and South Korea's KOSPI indices to gains of 2.5% and 3.5%, respectively.
U.S. stock index futures edged higher. S&P 500 futures rose 0.1%, with the index poised for its ninth consecutive weekly gain. Dow Jones Industrial Average futures advanced 0.2%, while futures for the tech-heavy Nasdaq 100 climbed 0.2% in pre-market trading.
On Thursday, the S&P 500 and Nasdaq Composite indices recorded their 21st and 17th closing highs of 2026, respectively. Patrick Munnelly of Tickmill Group noted that as long as there is no significant sell-off, the S&P 500 is on track for its ninth straight weekly gain—a streak that has only occurred four times since 1985.
Signs of robust demand for AI infrastructure-related stocks re-emerged. Dell Technologies surged 38% in pre-market trading after the hardware manufacturer issued a sales outlook that far exceeded analyst expectations, primarily driven by demand for servers used to run AI workloads.
However, space-related stocks gave back some of their recent gains. Shares of AST SpaceMobile fell 14% and Rocket Lab declined 5.4% after reports, citing people familiar with the matter, indicated that Elon Musk's SpaceX had lowered its valuation target to at least $1.8 trillion.
"The market is receiving confirmation signals on multiple fronts, which will continue to extend the rally for any assets related to artificial intelligence," said Jason da Silva, Global Investment Strategist at Arbuthnot Latham.
Expectations for a ceasefire extension are heating up. According to a report by Axios citing multiple U.S. officials, if a memorandum is finalized, it would represent the most significant diplomatic breakthrough between the U.S. and Iran since the outbreak of conflict in the Middle East in February. U.S. officials stated that most terms were agreed upon by Tuesday of this week, pending final approval from senior leadership on both sides. Sources indicated that Iranian negotiators subsequently informed the U.S. that Tehran had obtained the necessary approvals and was prepared to sign, though the Iranian government has not publicly confirmed this.
According to informed sources, a preliminary agreement between Washington and Tehran to extend a ceasefire by 60 days is awaiting approval from the U.S. President. The U.S. Vice President told reporters on Thursday that both sides were still negotiating over "some wording issues," including matters related to Iran's nuclear capabilities. Iranian state media also stated that the arrangements had not been finalized.
Brent crude oil fell 1.2%, dipping below $93 per barrel, putting the benchmark on track for its largest monthly decline since the onset of the COVID-19 pandemic. U.S. Treasury yields were steady after several days of gains, while the U.S. dollar also traded sideways.
Prospects for a Middle East peace deal are easing pressure on oil prices and bolstering market confidence that the most severe inflation fears may not materialize. Concurrently, the U.S. market continues to be supported by the unprecedented rally in AI-related stocks. Since early April, shares of U.S.-listed chipmakers have surged nearly 70%.
"Brent crude falling below $90 by next weekend seems within reach," said Florian Ielpo, Head of Macro at Lombard Odier Investment Managers. "If that happens, it would create a fairly favorable market environment, as oil prices have been the source of most macro concerns this year."
Analysts at ING noted that while the reopening of the Strait of Hormuz would provide immediate relief to the market, some expectations for a deal are already priced in. "Further significant downside may be limited, especially in the initial stages of a ceasefire." The analysts also pointed out that shipowners might remain hesitant to redeploy vessels to the Persian Gulf due to fears that a ceasefire could break down, leading to renewed vessel detentions.
The U.S. dollar is on track for a slight weekly decline, primarily reflecting a pullback in U.S. Treasury yields. The currency traded steadily as investors remained cautious. The euro was stable around 1.1650 against the dollar.
However, analysts noted that the decline in U.S. Treasury yields might be limited, as even a U.S.-Iran deal is unlikely to quickly reverse inflationary pressures caused by high fuel prices. In bond markets, global yields have generally fallen this week. The yield on the two-year U.S. Treasury note edged down 0.2 basis points to 4.022%, while the 10-year yield fell 1 basis point to 4.440%.
"The preliminary agreement between the U.S. and Iran to extend the ceasefire is the market focus this morning," said Kristoffer Kjaer Lomholt of Danske Bank in a note. More importantly, he noted, Thursday's U.S. PCE inflation data pushed yields lower, with the 30-year Treasury yield now clearly retreating below 5.00%.
"The market has already been pricing in an agreement and the reopening of the Strait of Hormuz," said Jason Wong, Senior Market Strategist at Bank of New Zealand in Wellington. "The key point is that this removes the tail risk of an extremely bad outcome. But I don't think it means oil can fall another $20 or Treasury yields can drop another 20 basis points."
Eurozone government bond yields edged higher in early trading, though the yield on the 10-year German Bund remained below 3%. "With Middle East news improving again and U.S. PCE inflation coming in below expectations, the 10-year Bund yield is encountering resistance above 3%," said Christoph Rieger of Commerzbank. The yield on the 10-year German Bund rose 1 basis point to 2.971%.
Investors are also monitoring other geopolitical risks. NATO member Romania stated on Friday that a drone overnight strike on neighboring Ukraine injured two people. This marks the first time since the Russia-Ukraine war began that a drone has hit a populated area in Romania, causing injuries.
As energy prices cool, investors are scaling back expectations for a stagflationary shock to the global economy. Comments from the President of the Federal Reserve Bank of Minneapolis, suggesting it was premature to judge that interest rates need to rise, provided support for U.S. Treasuries, which rallied for a sixth consecutive session through Thursday.
"If an agreement is reached, we should see further gains in risk assets and a further decline in rates," said Mohit Kumar, Chief European Economist and Strategist at Jefferies. "From a positioning perspective, the reaction in the rates market could be larger than in equities."
However, Guillermo Hernandez Sampere, Head of Trading at MPPM, noted that the market remains unable to clearly gauge the specific scope of the conflict's consequences, which in itself is a reason for caution. "Due to previous disappointments, market exuberance remains relatively restrained," he said. "Short-term price volatility is still insufficient to provide lasting stability for oil-dependent equities."
Bitcoin staged a modest rebound after hitting a six-week low. The cryptocurrency rose 0.3% to $73,663 as uncertainty around U.S.-Iran negotiations persisted. According to LSEG data, Bitcoin fell to a low of $72,504 on Thursday.
Gold prices advanced. Gold futures rose 0.5% to $4,554.40, putting the metal on track for a modest weekly gain of 0.7%. Analysts at Saxo Bank stated, "Easing energy-driven inflation concerns are pushing bond yields and the dollar lower, thereby supporting gold." However, they also noted that "gold remains in a challenging technical environment."
Markets will closely watch speeches from several Federal Reserve officials on Friday for clues on how the central bank might respond to Thursday's key inflation data. The Governor of the Bank of England is also scheduled to speak.
**Notable Stocks** Dell Technologies shares soared nearly 37% after the company raised its full-year guidance. Dell now expects full-year adjusted earnings per share of $17.90 and revenue in the range of $165 billion to $169 billion. Analysts surveyed by London Stock Exchange Group had previously anticipated EPS of $13.09 and revenue of $142.5 billion.
**Computer Hardware Stocks:** Boosted by Dell's strong results, shares of other computer hardware and services companies rallied. Hewlett Packard Enterprise surged over 17%, Super Micro Computer gained nearly 10%, and HP Inc. rose close to 7%.
**American Eagle Outfitters:** Shares of the teen-focused apparel retailer fell about 11%. Comparable store sales for its main American Eagle brand fell 2% in the first quarter, whereas analysts surveyed by StreetAccount had expected a 3.1% increase. The company's second-quarter guidance also fell short of expectations, with projected operating income of $45 million to $50 million, below the FTSE consensus estimate of $65.3 million.
**Gap Inc.** shares plunged over 15% after the apparel retailer lowered its full-year revenue forecast. The company now expects overall full-year sales growth of 1% to 2%, down from a previous forecast of 2% to 3%. According to London Stock Exchange Group data, Gap's first-quarter revenue was $3.5 billion, slightly below the analyst consensus of $3.52 billion; however, its adjusted earnings per share of 38 cents exceeded the market expectation of 37 cents.
**Space Stocks:** Shares of space-related companies declined after a Blue Origin rocket exploded during a ground test at a Florida launch pad on Thursday evening. AST SpaceMobile, which has a partnership with Blue Origin, plummeted nearly 15%. EchoStar Communications fell 4.5%, and Rocket Lab dropped 5.5%.
**Okta Inc.** shares rose nearly 8% after the identity management software company issued quarterly and full-year revenue guidance that exceeded analyst expectations from FTSE. Additionally, the company's first-quarter non-GAAP earnings, revenue, and operating profit all beat market consensus.
**NetApp Inc.** shares surged 16.5% after the data infrastructure services provider issued first-quarter and full-year guidance that surpassed analyst forecasts from FTSE. The company's adjusted earnings and revenue for its fourth fiscal quarter also exceeded expectations.
**Autodesk Inc.** shares fell 7%. The design and engineering software developer reported first-quarter non-subscription revenue of $98 million, below the market expectation of $100.4 million compiled by StreetAccount. However, its overall first-quarter revenue and profit beat expectations, and it projected current-quarter earnings and revenue to be above FTSE consensus estimates.
**Snowflake Inc.** shares skyrocketed 36% on Thursday following its earnings report, marking its best single-day performance ever. In Friday's pre-market trading, the stock added another 1.5%. HSBC upgraded the stock to "buy," citing expectations for rising demand for its AI tools.
**Asana Inc.** shares gained 2%. According to London Stock Exchange Group data, the enterprise work management platform projected full-year revenue in the range of $856 million to $864 million, above the analyst consensus of $854 million. Its current-quarter revenue forecast of $213 million to $215 million also exceeded the market estimate of $212 million.
**MongoDB Inc.** shares advanced 3.5% after the software company raised its full-year guidance for adjusted EPS, revenue, and adjusted operating profit. All metrics are now projected to be above analyst expectations from FTSE. The company's first-quarter results for these three key metrics also surpassed market expectations.
**PagerDuty Inc.** shares rose 12.5% after the cloud computing company raised its full-year earnings guidance. It now expects full-year adjusted EPS in the range of $1.27 to $1.32, up from a previous guide of $1.23 to $1.28 and above the FTSE consensus of $1.26. Its first-quarter adjusted earnings, revenue, and adjusted operating profit also performed strongly, exceeding expectations.
**Elastic N.V.** shares tumbled over 6% after the software company projected current-quarter adjusted EPS in the range of 57 to 59 cents, below the analyst consensus of 63 cents from FTSE. However, its adjusted earnings and revenue for the fourth fiscal quarter beat market expectations.
**SentinelOne Inc.** shares plunged 16% after the cybersecurity company projected current-quarter revenue in the range of $289 million to $291 million, below the London Stock Exchange Group analyst consensus of $292 million. Its adjusted earnings guidance for the period also fell short of expectations.
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