June S&P 500 E-Mini futures (ESM26) are up +0.46% this morning, extending yesterday’s gains as fresh signs emerged that the U.S. and Iran are moving closer to a peace deal.
Iran’s semi-official Mehr news agency reported that a draft agreement consists of 14 provisions. These include the reopening of the Strait of Hormuz within 30 days, the release of $24 billion in frozen Iranian assets, and 60 days of negotiations over nuclear issues. Iran’s foreign ministry told state-run media that a framework text was close to being finalized. Bloomberg reported on Friday that an agreement could be signed as early as Sunday in Geneva, Switzerland.
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U.S. President Donald Trump on Thursday called off threatened military strikes against Iran, citing “discussions” that “have been brought to the highest level of Iranian leadership” for a negotiated end to the war. Hours later, Mr. Trump told reporters that the agreement could be signed as soon as this weekend in Europe, with Vice President JD Vance in attendance. “We just made a great settlement of the war with Iran, and we’re going to be subject to finalization of documents, we should get done over the next few days,” Trump said.
The price of WTI crude fell more than -3% on Friday, extending losses from the previous session amid optimism for a peace deal between the U.S. and Iran.
Investors are now awaiting the release of the University of Michigan’s preliminary reading on U.S. consumer sentiment and SpaceX’s historic debut.
In yesterday’s trading session, Wall Street’s major indices closed sharply higher. Chip and AI infrastructure stocks rallied, with Sandisk (SNDK) jumping over +14% to lead gainers in the S&P 500 and Nasdaq 100, and Lam Research (LRCX) surging more than +12%. Also, InterDigital (IDCC) advanced about +9% after announcing it had entered into a patent license agreement with Amazon.com and that the two companies had agreed to resolve all pending litigation. In addition, Navan (NAVN) climbed more than +8% after the corporate travel and expense management company posted better-than-expected Q1 results and raised its full-year revenue guidance. On the bearish side, Oracle (ORCL) slumped more than -8% and was among the top percentage losers on the S&P 500 after the software and cloud-computing company reported quarterly capital expenditures that exceeded estimates.
Economic data released on Thursday showed that the U.S. producer price index for final demand rose +1.1% m/m and +6.5% y/y in May, stronger than expectations of +0.7% m/m and +6.4% y/y. However, the core PPI, which excludes volatile food and energy costs, rose +0.4% m/m and +4.9% y/y in May, weaker than expectations of +0.5% m/m and +5.4% y/y. Separately, the number of Americans filing for initial jobless claims in the past week unexpectedly rose by +4K to a 4-month high of 229K, compared with the 220K expected.
“This inflationary spike is likely temporary and will subside once the Iran war ends,” said Clark Bellin at Bellwether Wealth.
After Thursday’s wholesale inflation figures, many economists now expect the core PCE price index, the Fed’s preferred inflation gauge, to pick up to +3.4% y/y in May from +3.3% y/y in April. That would mark the fastest pace since late 2023.
Meanwhile, U.S. rate futures have priced in a 96.4% probability of no rate change and a 3.6% chance of a 25 basis point rate cut at the June 16-17 monetary policy meeting, the first to be chaired by the central bank’s new chairman, Kevin Warsh.
Today, investors will focus on the University of Michigan’s U.S. Consumer Sentiment Index, which is set to be released in a couple of hours. Economists forecast that the preliminary June figure will come in at 46.1, compared to 44.8 in May. Also, investors will receive another update on inflation with the University of Michigan’s survey of inflation expectations.
Market participants are also gearing up for SpaceX’s historic debut. Elon Musk’s rocket and AI company sold 555.6 million shares at $135 apiece, raising roughly $75 billion in the biggest IPO ever. At that price, SpaceX has a market capitalization of $1.77 trillion. Including employee stock options and restricted share units, the pricing implies a fully diluted valuation of about $1.8 trillion. SpaceX is set to begin trading on the Nasdaq today under the ticker symbol “SPCX.” Shadow markets were pricing in a surge of at least 35% for SpaceX on its debut.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.45%, down -0.47%.
The Euro Stoxx 50 Index is up +1.80% this morning as optimism over a U.S.-Iran peace deal pushed oil prices lower and boosted sentiment. U.S. President Trump on Thursday called off plans to strike Iran and said a peace deal could be signed as soon as this weekend in Europe. Travel stocks led the gains on Friday as oil prices sank. Bank stocks also climbed. The benchmark index is on track to end the week higher. Final data released on Friday showed that Germany’s annual inflation rate eased to 2.6%, France’s rose to 2.4%, and Spain’s held steady at 3.2% in May, all in line with preliminary estimates. Separately, data showed that the U.K. economy contracted in April after a strong start to the year, with the fallout from the Middle East conflict expected to further dampen activity. Meanwhile, the European Central Bank raised interest rates on Thursday for the first time in nearly three years, becoming the first major central bank to tighten policy in response to the Iran war. ECB Governing Council member Joachim Nagel said on Friday that the central bank will keep all options on the table for its July policy meeting and stands ready to act again if necessary to prevent an Iran-war-driven surge in energy prices from spreading. In corporate news, Entain Plc (ENT.LN) rose over +2% after Barclays upgraded the European gaming sector to Market Weight.
Germany’s CPI, France’s CPI, Spain’s CPI, and U.K. GDP data were released today.
The German May CPI fell -0.2% m/m and rose +2.6% y/y, in line with expectations.
The French May CPI rose +0.1% m/m and +2.4% y/y, in line with expectations.
The Spanish May CPI rose +0.1% m/m and +3.2% y/y, in line with expectations.
U.K. April GDP fell -0.1% m/m and rose +1.2% y/y, compared to expectations of -0.1% m/m and +1.3% y/y.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.12%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +2.81%.
China’s Shanghai Composite Index closed higher today, tracking broad gains across Asian markets after U.S. President Donald Trump said the U.S. was nearing an agreement with Iran. Gold, broker, and defense stocks outperformed on Friday. Also, space-related stocks popped, buoyed by momentum from SpaceX’s upcoming listing, with AVIC Chengdu Aircraft and Chengdu Spaceon Electronics jumping over +10%. The benchmark index eked out its first weekly gain in a month. Meanwhile, Bloomberg News reported on Friday that China told major state-owned banks to scale back their lending in the interbank market to prevent borrowing costs from falling too far below the policy interest rate. Elsewhere, Goldman Sachs economists said that recent discussions surrounding China’s reported plan to spend 2 trillion yuan on data center construction signal a further shift in government-led investment toward high-tech manufacturing and AI infrastructure. In corporate news, Chow Tai Fook Jewellery Group jumped over +15% in Hong Kong after the jewelry retailer posted strong full-year profit driven by higher gold prices and projected continued revenue growth.
Japan’s Nikkei 225 Stock Index closed sharply higher today as optimism over a potential U.S.-Iran peace deal boosted investor risk appetite. U.S. President Trump said on Thursday that a peace agreement with Iran could be signed as early as this weekend. “Sentiment has improved as a result of Trump’s comments — investors are moving on the assumption that a deal is within reach,” said Koji Takeuchi at Itochu Research Institute. Semiconductor-related stocks climbed on Friday, capping a volatile week marked by geopolitical uncertainty, inflation concerns, and fears of an AI bubble. Metal stocks also advanced. However, the Nikkei gave up part of its gains after the special quotation prices used to determine the settlement values of index options and futures were set. Despite Friday’s sharp gains, the benchmark index posted a weekly loss, snapping a 3-week winning streak. Meanwhile, Japanese government bond yields fell on Friday as inflation concerns eased amid growing hopes for a peace deal in the Middle East. On the economic front, data showed that Japan’s monthly industrial production rebounded less than initially estimated in April. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -2.46% to 37.28.
The Japanese April Industrial Production was revised lower to +0.5% m/m from the preliminary estimate of +0.8% m/m.
Pre-Market U.S. Stock Movers
The Magnificent Seven stocks advanced in pre-market trading, with Alphabet (GOOGL) and Meta Platforms (META) rising over +1%.
Space-related stocks climbed in pre-market trading ahead of SpaceX’s listing, with Rocket Lab (RKLB) gaining more than +6% and Redwire (RDW) advancing over +4%.
Nebius (NBIS) surged more than +5% and CoreWeave (CRWV) gained over +4% in pre-market trading after Nasdaq announced that the stocks would be added to the Nasdaq 100 index on June 22nd.
Advanced Micro Devices (AMD) rose over +1% in pre-market trading after Citi upgraded the stock to Buy from Neutral with a price target of $575.
Adobe (ADBE) slid more than -6% in pre-market trading after the company announced that its chief financial officer would depart, overshadowing its better-than-expected FQ2 results and FQ3 guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - June 12th
Twenty One Capital (XXI), High Templar Tech (HTT), Comtech Telecommunications (CMTL), enGene Therapeutics (ENGN).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.