Wall Street kicked off the holiday-shortened week with stocks joining bonds higher as hopes for a peace deal between the US and Iran overshadowed military strikes in the Persian Gulf. According to reports from The Hindu BusinessLine, the S&P 500 rose 0.6% as of 4 p.m. New York time, reaching a record high, while the Nasdaq 100 surged 1.2% to set its own record. The rally was led by chipmakers, with Micron Technology Inc. jumping 19.3% after UBS Group AG raised its price target to a Street-high view of $1,625. As per Business Standard, Micron's stock leaped to $895.88, making it the strongest force lifting the S&P 500 after analysts forecasted continued strength in computer memory demand.
The US is touting progress toward a deal to end the nearly three-month war, with President Donald Trump writing on social media that Iran's highly enriched uranium would be "destroyed in place or at another acceptable location, with the Atomic Energy Commission or its equivalent being witness." As reported by PBS News Hour, this represents a potential softening of his position and echoes what Iranian officials have told the news program, that they are willing to export their highly enriched uranium to the UN's nuclear watchdog, the IAEA, but not to the US. Secretary of State Marco Rubio told reporters that the strikes won't set back the peace talks, stating that "it's going to take a couple days to settle on even down to the disagreements over a word, a sentence."
Despite the US-brokered ceasefire, Israeli Prime Minister Benjamin Netanyahu has ordered more frequent and heavier strikes against Iran-backed Hezbollah militants across Lebanon. According to PBS News Hour, massive strikes overnight leveled entire blocks in Southern and Eastern Lebanon, killing at least a dozen people. Netanyahu announced that Israeli troops would be pushing further north, stating that "under my direction, the IDF is operating with large forces on the ground and is seizing controlled areas." The war, which began when the US and Israel attacked Iran in late February, has closed the Strait of Hormuz and trapped oil tankers in the Persian Gulf, cutting off crude deliveries worldwide. As reported by Business Standard, Brent crude rose 3.5% to $96.67, though this reclaimed only a portion of Monday's sharp plunge. U.S. crude fell 2.8% to settle at $93.89 a barrel, bucking the trend and helping ease bond market pressure.
Treasury yields fell as concerns over a flare-up in inflation eased, making traders pare back their wagers on near-term Federal Reserve rate hikes. According to The Hindu BusinessLine, the yield on 10-year Treasuries declined seven basis points to 4.49% from 4.56% late Friday. As reported by Business Standard, lower oil prices helped pull yields down in the U.S. bond market, which eased the pressure on Wall Street. The latest West Asia developments left the oil market volatile, with Brent rising to around $100 after sinking more than 7% Monday.
Data showed US consumer confidence edged down in May as views of current economic conditions settled back amid rising prices due to the war. As reported by The Hindu BusinessLine, the Conference Board's gauge fell to 93.1 after an upward revision to the prior month, below the median economist estimate of 92. The decline was less dramatic than expected given current pricing pressures, with consumers feeling the employment situation will improve by the end of the year. According to Business Standard, U.S. households have grown increasingly discouraged due to accelerating inflation, with a Tuesday report showing consumer confidence edged lower in May though the reading came in better than economists had feared. This followed a Friday report showing U.S. consumer sentiment had fallen to its lowest level on record.
United Airlines rose 6% and Norwegian Cruise Line Holdings steamed 4.9% higher as major technology stocks continued their strong runs. According to Business Standard, AutoZone dropped 9% after reporting slightly weaker revenue for the latest quarter than analysts expected, with CEO Phil Daniele noting that performance for stores in Brazil and Mexico was below plan. Space and satellite-related stocks rallied as investor enthusiasm around the industry intensified after Elon Musk's SpaceX filed for a public offering last week. In global markets, many indexes slipped, including a 0.2% dip for Japan's Nikkei 225 from its all-time high set the day before, while South Korea's Kospi jumped 2.5% as it caught up with other markets following its closure on Monday for a holiday. London's FTSE 100 added 0.2% even though British petroleum giant BP fell 4% after ousting its chairman over governance concerns.
