Markets pushed higher Friday as investor optimism grew over the prospect of a swift interim peace agreement between the United States and Iran.
The S&P 500 Index ($SPX) (SPY) gained +0.50%, while the Dow Jones Industrial Average ($DOWI) (DIA) climbed +0.70% and the Nasdaq 100 Index ($IUXX) (QQQ) advanced +0.64%.
June E-mini S&P futures (ESM26) rose +0.65% and June E-mini Nasdaq futures (NQM26) added +0.87%, reflecting broad-based bullish sentiment heading into the weekend.
Friday’s gains extended a rally that began Thursday, fueled by hopes that the US and Iran could sign an interim peace agreement within the next several days.
Such a deal would end military hostilities, reopen the Strait of Hormuz, and lift the US blockade on Iran and its oil exports, offering significant relief to global energy markets.
Longer-term negotiations would then address more complex issues, including sanctions against Iran, the release of $24 billion in frozen Iranian assets, and the resolution of Iranian nuclear concerns.
Iran tempered some of the optimism, however, stating that its leaders still need to make a final decision on the proposed interim peace deal.
The initial wave of buying began Thursday after President Trump canceled planned military strikes against Iran, citing “discussions” with the Iranian leadership, and stating that the “time and place of the signing” of a negotiated end to the war would “be announced shortly.”
WTI crude oil prices (CLN26) dropped -3.23% Friday, reflecting market expectations that a deal could soon reopen the Strait of Hormuz and ease supply disruptions that had lifted energy prices in recent weeks.
Nasdaq’s announcement Thursday that several stocks would join the Nasdaq 100 Index, effective at the market open on June 22, drove notable moves in Astera Labs (ALAB), CoreWeave (CRWV), Nebius Group (NBIS), Rocket Lab (RKLB), and Teradyne (TER).
The additions come at the expense of Charter Communications (CHTR), Cognizant Technology Solutions (CTSH), Insmed (INSM), Verisk Analytics (VRSK), and Zscaler (ZS), all of which will exit the index.
Travelers (TRV) edged up +0.18% despite Barclays cutting its rating on the stock to underweight from equal-weight, citing a downbeat outlook for profits in the property and casualty insurance sector.
The combination of geopolitical de-escalation and index rebalancing activity gave traders multiple catalysts to work with, sustaining buying momentum across most major market sectors throughout the session.
