Anticipation of a U.S.-Iran ceasefire agreement, coupled with strong gains in technology stocks, propelled global equity markets to record highs. The MSCI World Index rose 0.4%, setting a new record, while oil prices retreated. U.S. stock futures edged higher on Friday, with the S&P 500 on track for its ninth consecutive weekly gain, a streak seen only four times since 1985. European markets opened higher, and Asian equities broadly advanced, with Japanese and South Korean benchmarks hitting all-time highs. U.S. Treasury yields held onto overnight gains, and the dollar was steady. In commodities, easing concerns over energy supply disruptions pressured oil prices lower. Inflation worries moderated, with spot gold rising 0.55% to $4,520. The technology sector remained a key focus. Dell Technologies' stock surged nearly 40% in pre-market trading following an optimistic sales outlook. The AI-driven rally has been lifting global markets, with the prospect of a delayed ceasefire further fueling gains. Since the conflict began, disruptions to traffic through the Strait of Hormuz have constrained oil shipments, intensifying inflationary pressures. Traders are closely watching for signs of its potential reopening. On the geopolitical front, the U.S. and Iran are nearing a historic 60-day ceasefire and maritime channel de-escalation agreement. According to reports, U.S. officials stated that negotiators had largely agreed on the terms of a memorandum of understanding by the 26th, pending approval from senior leadership on both sides. Iran indicated it had obtained necessary approvals and was prepared to sign, stating, "The President has told mediators he needs a few days to consider the matter." Concurrently, Iranian sources reported that, as of now, Iran has not agreed to any memorandum nor confirmed its approval to mediators from Pakistan. Senior strategist Louis Navellier commented, "Even a 60-day agreement that allows traffic to resume through the strait should trigger a rebound, as severe supply disruptions are rapidly approaching." Key market movements were as follows: * S&P 500 futures rose 0.13%; Nasdaq 100 futures gained 0.09%. * The Euro Stoxx 50 opened 0.2% higher; Germany's DAX rose 0.1%; the UK's FTSE 100 gained 0.1%; France's CAC 40 advanced 0.4%. * Japan's Nikkei 225 closed up 2.5% at 66,329.50, a record closing high. The Topix index closed 1.4% higher at 3,957.17. South Korea's KOSPI index closed up 3.6% at 8,476.15, also a record closing high. * The yield on the 10-year U.S. Treasury note was largely flat at 4.44%. * The Bloomberg Dollar Spot Index was little changed; the yen traded around 159.30 per dollar. * Brent crude fell 0.8% to $91.95 per barrel; WTI crude dropped 1%. Spot gold rose 0.55% to $4,520, while spot silver fell 0.3%. * Bitcoin rose 0.1% to $73,569.87. Ethereum was largely flat at $2,011.04.
**Dual Drivers: Tech and Geopolitics Lift U.S. Futures** Buoyed by strength in the technology sector and easing geopolitical tensions, U.S. stock futures posted modest gains, with Nasdaq 100 futures up 0.09%. Dell's stock soared 38% pre-market after its earnings report released after hours on May 28 showed revenue of $43.8 billion, surpassing the most optimistic analyst estimate by a full 21%. Non-GAAP earnings per share were $4.86, 66% above the highest forecast. The company raised its full-year revenue guidance midpoint from the market consensus of $44 billion to $67 billion, an upward revision of approximately $3 billion. Meanwhile, rising energy costs have exacerbated price pressures, fueling concerns that the Federal Reserve may be forced to raise interest rates. U.S. consumer spending saw only a modest rebound in April, weighed down by inflationary pressures from the conflict eroding incomes and pushing the savings rate to its lowest level in nearly four years. Pooja Malik of Nipun Capital stated, "The market is looking for a reason to continue moving higher. Given the current crowded positioning and rising inflation and rate hike risks, even a slight shift in sentiment could lead to a rapid unwinding of this trade."
**Japanese, South Korean Markets Hit Record Highs** Japan's Nikkei 225 closed up 2.5% at 66,329.50, setting a new all-time closing high. The Topix index gained 1.4% to close at 3,957.17. SoftBank Group rose 6%, with market analysis suggesting OpenAI's potential IPO and $40 billion refinancing plan acted as catalysts. South Korea's KOSPI index closed up 3.6% at 8,476.15, reaching a historic closing peak. Samsung Electronics surged 6% following a company statement announcing it had begun delivering the industry's first 12-layer HBM4E samples to major global customers.
**Geopolitical Easing Weighs on Oil; Gold Posts Modest Gain** Expectations of reduced geopolitical tensions pressured oil prices lower. Brent crude fell 0.8% to $91.95 per barrel, bringing its cumulative decline for May to over 18%, positioning it for its largest monthly drop since March 2020. Spot gold rebounded slightly by 0.5%, hovering around $4,515 per ounce. However, it is on track for its third consecutive monthly decline, marking the longest losing streak since October 2022. While gold has experienced heightened volatility recently, some institutions maintain that its long-term bullish thesis remains intact. In a recent report, Doug Moglia, Macro & Markets Strategist at Rockefeller Global Investment Management, explicitly stated that gold's long-term bull market structure is intact. He forecasts gold prices will break through $5,500 by 2027, reach $8,000 before 2030, and potentially test $10,000 in an overshoot scenario.
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