US Stocks Post Most Significant Weekly Gain Since 2023

Global Stocks Rise Ahead of Peace Deal Progress and AI Enthusiasm

The S&P 500 is poised to achieve its longest streak of weekly gains since 2023, driven by the prospect of progress toward a peace deal in the Middle East and unrelenting enthusiasm for artificial intelligence. As a result, futures for the benchmark have risen 0.2%, putting the S&P 500 on track for an eighth consecutive week of gains.

The energy sector has also seen a rebound, with Brent rising 1.9% toward $105 a barrel. However, despite this increase, Brent remains lower for the week. Meanwhile, US Treasuries have risen ahead of Kevin Warsh's swearing in as Federal Reserve chair, indicating a decrease in borrowing costs and a potential shift in the White House's stance on the Middle East.

Markets are entering the weekend with a sense of calm, having shaken off concerns that severe disruptions to energy flows from the Middle East could lead to higher inflation. The absence of a widening conflict between Iran and the US, combined with growing interest in artificial intelligence, has contributed to subdued volatility despite conflicting reports on peace talks.

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The US economy is experiencing a significant capital spending boom, with Guy Miller, chief market strategist at Zurich Insurance, noting that this has led to record corporate profitability. This, in turn, is generating profitability for other suppliers and companies, creating a virtuous circle.

US Treasuries have gained for three consecutive days, following a period in which yields tested multiyear highs. Investors believe that US authorities remain vigilant regarding borrowing costs and that current levels will bolster the White House's resolve to find a resolution in the Middle East.

US Bond Market Focus

The administration is highly attentive to the bond market, with Andrea Gabellone, head of global equities at KBC Securities, stating that they will not allow the curve to steepen much further. This focus on the bond market is seen as a key factor in the White House's efforts to find a diplomatic solution to the conflict in the Middle East.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Global Market Movements

US allies are urging President Donald Trump to give negotiations a chance, with the United Arab Emirates joining Saudi Arabia and Qatar in this effort. US Secretary of State Marco Rubio has reported "slight progress" in mediated talks.

Several notable companies have seen significant movements in premarket trading. Workday Inc. jumped 8.2% after a first-quarter beat, while Estee Lauder Cos. advanced 10% following the collapse of a proposed combination with Puig Brands SA. However, US-listed Chinese stocks fell after China's securities regulator announced plans to penalize three cross-border brokerages.

In Europe, the semiconductor-linked stocks, including STMicroelectronics NV and ASML Holding NV, led gains in the Stoxx 600. The region's semiconductor sector has been a key driver of growth in recent months.