Wall Street indices staged a strong recovery on Friday, with the S&P 500 rising 0.37% to 7,473.47, gaining 27.75 points, while the Dow Jones Industrial Average posted a record closing high, rising 294.04 points or 0.58% to 50,579.70. The Nasdaq Composite gained 50.87 points or 0.19% to 26,343.97, as reported by The Economic Times. The S&P 500 was set for an eighth straight week of gains, its longest streak since 2023, following an 18% surge from war-fuelled lows. The market rebound came after reports that the U.S. has made some progress toward a deal with Iran, though more work remains, as Secretary of State Marco Rubio said there's been "some progress" in negotiations. The agreement includes an immediate ceasefire on all fronts, guaranteed freedom of navigation in the Gulf and the Strait of Hormuz, and the launch of negotiations on outstanding issues within a week. Pakistan's military chief arrived in Tehran on Friday to press on with mediation efforts to end the conflict, according to The Economic Times. US consumer sentiment fell in May to a record low and long-term inflation expectations worsened notably due to the war, according to The Hindu BusinessLine. Iran's foreign ministry spokesperson said the two sides' differences were deep and significant, with the focus on ending the war.
Kevin Warsh was sworn in as chair of the Federal Reserve on Friday, taking the helm at a pivotal moment for the U.S. economy as higher gasoline prices tied to the Iran conflict fuel inflation and weigh on consumer sentiment. Fed Governor Christopher Waller said his current position is to be patient in holding rates until the war's impact is clearer, while warning he wouldn't rule out a future rate hike if inflation doesn't start to slow soon. Money markets fully priced in a hike this year, with two-year yields hitting the highest since February 2025. The yield on benchmark U.S. 10-year notes fell 2.6 basis points to 4.558%, from 4.584% late on Thursday, as reported by The Economic Times. "You're starting to see a larger negative correlation between bond yields and stock prices," said Anthony Saglimbene, chief market strategist at Ameriprise. "Now that we're out of the earnings season, these macro conditions may be a bigger factor," he added. Investors are worried that ongoing energy disruptions because of the conflict will filter through to core consumer prices, potentially forcing a tighter monetary policy response. The yield on 10-year Treasuries declined one basis point to 4.56%, while the yield on 2-year Treasuries advanced four basis points to 4.12%.
MSCI's gauge of stocks across the globe rose 5.66 points or 0.51% to 1,112.55, with European shares finishing at their highest level in more than a month and logging their biggest weekly gain in seven years, according to The Economic Times. The pan-European STOXX 600 index rose 0.73%, helped by technology stocks. Turkey's financial markets rebounded after being rattled this week by political moves against the country's main opposition party, with the benchmark BIST 100 index rising 4.9% in Istanbul, recovering from a 6% plunge on Thursday that had triggered a suspension of trading after a top court moved to effectively oust main opposition leader Ozgur Ozel. Oil prices finished higher, with U.S. crude rising 25 cents to settle at $96.60 a barrel and Brent gaining 96 cents to settle at $103.54, as reported by The Economic Times. The dollar held near six-week highs as traders monitored talks on the war and assessed whether the U.S. Federal Reserve would raise interest rates if inflation continued to accelerate. The dollar index rose 0.04% to 99.24, with the euro down 0.06% at $1.1611, while against the Japanese yen, the dollar strengthened 0.11% to 159.13.
Semiconductor stocks, which have driven recent Wall Street gains, were mostly higher with the Philadelphia Semiconductor Index rising, led by a 12% jump in Qualcomm, while Nvidia slipped 1.6%, according to The Economic Times. Nine out of the 11 major S&P 500 sector indexes were gaining, led by healthcare, industrials and technology stocks, with communications and consumer staples losing ground. Shares of U.S. computer makers surged following strong results from China's Lenovo Group, which reported a better-than-expected 27% jump in quarterly revenue. Dell Technologies hit a record high after jumping 17% while HP Inc surged over 15%. Workday gained 5% after the human resources software provider exceeded expectations for first-quarter revenue and profit, as reported by Reuters. Estée Lauder rose 12% after the cosmetics maker and Spanish perfumery Puig ended talks for a potential merger, with shares up 11% as investors welcomed the collapse in talks. The proposed deal would have combined Estée Lauder's luxury brands, including Clinique and Tom Ford Beauty, with Puig's portfolio, which includes Charlotte Tilbury and Jean Paul Gaultier.
Oil prices finished higher despite peace deal optimism, with U.S. crude rising 25 cents to settle at $96.60 a barrel and Brent gaining 96 cents to settle at $103.54, as reported by The Economic Times. Oil prices had slipped below $100 after the U.S. said Iran negotiations are in "final stages," but uncertainty surrounding the Iran talks still concerns investors. On Friday afternoon, oil prices turned higher again after investors assessed conflicting developments from negotiations mediated by Pakistan between the United States and Iran. Spot gold fell 0.78% to $4,506.47 an ounce, while the dollar index rose 0.04% to 99.24, with the euro down 0.06% at $1.1611. Advancing issues outnumbered decliners by a 1.83-to-1 ratio on the NYSE, with 309 new highs and 68 new lows on the NYSE, while the S&P 500 posted 28 new 52-week highs and no new lows and the Nasdaq Composite recorded 116 new highs and 65 new lows. Data on Friday showed Japan's core inflation slowed to a four-year low in April, complicating the outlook for Bank of Japan policy.
