US Stock Market Rises on Optimism Over US-Iran Peace Talks
US Stock Futures Surge Amid Reports of US-Iran Deal
On Wednesday, 6 May, US stock futures traded with solid gains, driven by optimism surrounding a potential deal between the US and Iran to end the war in the Middle East. The news of a possible agreement sent oil prices plummeting, with benchmark US crude slipping $13.6 to $88.6 a barrel, and Brent crude losing $13 to a day's low of $97 a barrel.
The S&P 500 futures rose 1%, while those linked to the Nasdaq 100 gained 1.6%. Dow Jones Industrial Average futures advanced 1.1%. According to Axios, the White House is nearing a one-page, 14-point memorandum of understanding to end the war and establish a framework for more detailed nuclear talks. The plan reportedly involves Iran committing to a moratorium on its nuclear enrichment programme in exchange for Washington pledging to lift sanctions and release billions in frozen Iranian funds.
The developments came after US President Donald Trump announced that the US would temporarily halt "Project Freedom," a military operation launched to escort vessels through the Strait of Hormuz, citing progress in negotiations. However, the American forces' blockade of Iranian ports remains in place. Meanwhile, Iranian Foreign Minister Abbas Araghchi said talks were "making progress" but warned that the US and the United Arab Emirates "should be wary of being dragged back into a quagmire."
Earnings Growth and Record Highs
The S&P 500 and Nasdaq Composite indices rose to yet another fresh record highs on Tuesday. March-quarter earnings from tech majors have so far come in above Wall Street estimates, helping the S&P 500 and Nasdaq recover 16% and 18%, respectively, from their March lows. S&P 500 companies are now on track to post aggregate earnings growth of 28% year-on-year for the first quarter, the strongest quarterly profit growth since 2021, according to Reuters, citing LSEG research.
| Index | Record High | Recovery from March Lows |
|---|---|---|
| S&P 500 | 16% | |
| Nasdaq Composite | 18% |
Stocks in Focus
Vested Finance said stocks powered higher as optimism around a potential US-Iran deal triggered a sharp risk-on rally. Futures on the Nasdaq 100 surged 1.6%, while S&P 500 futures gained 1%, putting both indices on track to extend their record highs. Advanced Micro Devices surged nearly 18% in premarket after strong data center demand boosted its outlook. Across the globe, Samsung Electronics jumped 16%, while AI-linked names like Intel and Micron Technology also moved higher. The AI trade is clearly back in full force. Even deal activity is picking up, with Alphabet raising billions to fund AI investments and SpaceX planning a massive semiconductor facility, the brokerage added.
Investor Takeaway
US stock market rises on optimism over US-Iran peace talks, with futures tied to the S&P 500 and Nasdaq 100 gaining 1% and 1.6%, respectively.
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