S&P 500, Nasdaq Hit Records on US-Iran Ceasefire Extension
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- S&P 500 and Nasdaq posted record closing highs after reports the US and Iran reached a draft agreement to extend their ceasefire for 60 days, with the deal still pending Trump's approval and Iran's Tasnim agency saying the text is not yet finalized.
- US inflation accelerated at its fastest pace in three years in April, driven by higher energy prices tied to the Iran war, while Q1 GDP was revised lower to a 1.6% annualized increase.
- Snowflake shares surged 36% after the data analytics firm raised its annual product revenue forecast and announced a $6 billion five-year AI infrastructure deal with Amazon Web Services.
- Eli Lilly jumped 4% after CVS Health said it would restore Zepbound to its coverage and add Lilly's newly approved obesity pill Foundayo.
- Jamie Cox of Harris Financial Group warned traders are on a "hair trigger" with back-and-forth deal news and that inflationary forces "may not abate as fast as markets want."
- Dollar Tree climbed almost 18% after lifting its full-year profit forecast, while Best Buy rose 15.8% on a second-quarter sales forecast above estimates.
- Drone stocks rallied after the Wall Street Journal reported the Trump administration was in talks to fund drone firms, with Unusual Machines surging nearly 11%.
Why it matters: The S&P 500 is trading at 21-22x forward earnings versus a 10-year average of 19.7x — a premium Morgan Stanley's Kandhari says is justified by rising earnings expectations. But with April inflation at a three-year high and the ceasefire deal still unsigned, the rally hangs on a geopolitical agreement awaiting Trump's approval.
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