US Stocks Notch Third Straight Record on US-Iran Ceasefire
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- S&P 500 and Nasdaq closed at record highs for a third consecutive session, with the S&P 500 up 0.58% to 7,563.78 and the Nasdaq up 0.91% to 26,917.47, while the Dow added 0.05% to 50,669.77.
- US and Iran reportedly agreed to extend their ceasefire and launch negotiations after exchanging air strikes, a development Reuters described as a welcome reprieve from escalating hostilities.
- US economic data painted a stagflationary picture: Q1 GDP was revised lower, the saving rate sank to its lowest since June 2022, PCE inflation continued heating up, and core capital goods orders unexpectedly dropped.
- Federal Reserve, now under Trump appointee Kevin Warsh, faces a policy dilemma — Spartan Capital's Peter Cardillo argued a rate hike is "getting closer to reality" rather than a cut.
- Oil prices diverged on the ceasefire news — WTI rose 0.25% to $88.90 a barrel, while Brent, more exposed to Strait of Hormuz disruptions, fell 0.62% to $93.71.
- Treasury yields fell across the curve, with the 10-year at 4.453% and the 2-year at 4.025%, while the dollar index slipped 0.27% to 99.02 and spot gold reversed losses to rise 0.9% to $4,497.35 an ounce.
- European shares closed lower despite paring session lows, with the STOXX 600 down 0.49% and emerging market stocks falling 0.65% as US-Iran developments kept risk appetite subdued.
Why it matters: Markets shrugged off both geopolitical anxiety and stagflationary data to print records, but the underlying tension is real: weakening Q1 GDP alongside rising PCE inflation puts Fed Chair Kevin Warsh in a corner where a rate hike — not the cut markets had hoped for — becomes the more likely next move. The WTI-Brent split also signals traders are still pricing Strait of Hormuz supply risk despite the ceasefire headline.
