The S&P 500 Index ($SPX) (SPY) closed up +0.22% on Friday, while the Dow Jones Industrial Average ($DOWI) (DIA) gained +0.72% and the Nasdaq 100 Index ($IUXX) (QQQ) rose +0.36%.
All three major indexes posted new all-time highs, supported by prospects for a Middle East peace deal that eased pressure on crude oil prices and reduced inflation concerns.
President Trump said Friday he is making a “final determination” on a preliminary deal to extend a ceasefire with Iran by 60 days and reopen the Strait of Hormuz.
Crude oil prices fell more than -1% to a five-week low on the ceasefire extension news, though several hurdles remain before crude flows can resume.
Among those obstacles, mines in the Hormuz waterway must be removed, shut-in oil fields may take months to restart, and damage to energy infrastructure from drone and missile strikes needs to be repaired.
Dell Technologies (DELL) surged more than +32% to lead S&P 500 gainers after reporting Q1 total revenue of $43.84 billion, well above the consensus of $35.52 billion, and raising its 2027 revenue forecast to $165 billion to $169 billion from a previous estimate of $138 billion to $142 billion.
Okta (OKTA) closed up more than +30% after reporting Q1 adjusted EPS of 91 cents, above the consensus of 85 cents, and raising its 2027 adjusted EPS forecast to $3.79 to $3.87 from a previous estimate of $3.74 to $3.82.
NetApp (NTAP) closed up more than +22% after reporting Q4 net revenue of $1.95 billion, better than the consensus of $1.87 billion, and forecasting 2027 revenue of $7.33 billion to $7.58 billion, well above the consensus of $7.20 billion.
Software stocks broadly rallied, with Atlassian Corp (TEAM) up more than +15%, ServiceNow (NOW) up more than +13%, and International Business Machines (IBM) up more than +12% to lead Dow Jones gainers.
Workday (WDAY) closed more than +11% higher to lead Nasdaq 100 gainers, while Oracle (ORCL) gained more than +10%, Datadog (DDOG) and Palantir Technologies (PLTR) each rose more than +9%, and Salesforce (CRM) closed up more than +8%.
The May MNI Chicago PMI rose +13.5 to 62.7, stronger than expectations of 50.3 and the strongest pace of expansion in 4.25 years, pointing to broad economic strength.
San Francisco Fed President Mary Daly said Fed interest rate policy is in a good place and that she is “cautiously optimistic” about the US economy, noting that “there’s no urgency to make an adjustment” to interest rates.
Minneapolis Fed President Neel Kashkari said, “I think it’s premature for me to conclude we need to be raising rates right away and that we need to keep watching the data and watching how the conflict in the Middle East unfolds before I want to make any adjustments.”
Kansas City Fed President Jeff Schmid took a more cautious tone, saying, “With inflation running above the Fed’s 2% definition of price stability or over five years, now is not the time to let down our guard.”
Markets are discounting a 2% chance of a -25 bp FOMC rate cut at the next policy meeting on June 16-17, reflecting the overall resilience of the US economy.
As of Friday, 84% of the 485 S&P 500 companies that reported Q1 earnings have beaten estimates, with Q1 S&P 500 earnings projected to climb +12% year-over-year according to Bloomberg Intelligence.
Clorox (CLX) led S&P 500 decliners, closing down more than -6% after CEO Rendle Blair said she is stepping down for health reasons.
The Gap (GAP) fell more than -15% after reporting Q1 comparable sales rose +2.00%, weaker than the consensus of +2.93%, and cutting its 2027 net sales estimate to +1% to +2% from a prior forecast of +2% to +3%.
Costco Wholesale (COST) closed down more than -3% despite better-than-expected Q3 earnings, after several analysts flagged moderating membership growth as a concern going forward.
Japan’s Nikkei Stock Average rallied to a new record high, closing up +2.53%, while the Euro Stoxx 50 closed down -0.08% and China’s Shanghai Composite fell -0.73%.
