A narrow, tech-led rally lifted all three major US stock indexes to modest gains while benchmark US Treasury yields dipped for a fourth straight session, as markets turned the page on a week and month marked by fears that a fragile truce would collapse amid signs of progress toward a peace deal.
The S&P 500 notched its ninth straight weekly gain, its longest winning streak since December 2023.
The Dow Jones Industrial Average rose 363 points, or 0.72 percent, to 51,032, the S&P 500 rose 16 points, or 0.22 percent, to 7,580 and the Nasdaq Composite rose 55 points, or 0.21 percent, to 26,972.
All three indexes logged monthly advances.
Despite the rally, the indexes were well off session highs by the closing bell.
The United States and Iran agreed to extend their ceasefire and lift shipping restrictions as peace negotiations proceed, sources said, but US President Donald Trump had yet to approve the deal which, according to Iranian state media, has not yet been finalised.
“This administration watches the markets and they like to do big things when the markets are closed to control the messaging before the market has a chance to react,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.
“If the memo of understanding is approved by President Trump and we truly get 60 days of the Strait of Hormuz re-opened … I think 60 days should be plenty of time to come to a more substantive agreement.”
The three-month-long conflict has put upward price pressure on inflation, which threatens to grow less transitory and more established the longer the war drags on.
US Federal Reserve officials are now mulling over the possibility of hiking interest rates to counter that growing risk.
“The market has been pricing about a coin flip odds of a hike [in the fourth quarter] for a couple of weeks now,” Mayfield said.
“We’ll have plenty of data by then, but I don’t expect the Fed to do much of anything.” (Reuters)
