The S&P 500 closed up 0.61%, the Dow Jones Industrial Average fell 0.23%, and the Nasdaq 100 gained 1.76% on Tuesday. June e‑mini S&P futures rose 0.61%, while June e‑mini Nasdaq futures gained 1.72%. The index advances were led by new all‑time highs in the S&P 500 and Nasdaq 100, supported by lower crude‑oil prices and reduced bond yields.
U.S. officials indicated progress toward a deal to reopen the Strait of Hormuz, which has historically constrained oil flows. The Washington Post reported that a memorandum extends the ceasefire for 60 days as the parties negotiate a permanent settlement that would facilitate de‑mining and reopening of the strait. Secretary of State Rubio noted that language finalization would likely take only a few days. WTI crude fell to a 2.5‑week low, and the 10‑year Treasury yield dropped to a 1.5‑week low of 4.47%.
Market sentiment softened briefly after U.S. Central Command announced strikes on Iranian missile launch sites and anti‑marine mine attempts in the Strait of Hormuz. Dow-related energy and insurance stocks saw minor declines, offset by broader gains in technology and airline shares.
Economic data were mixed: the Apr Chicago Fed National Activity Index rose to a 13‑month high of 0.14, and the March S&P Composite‑20 home‑price index increased 0.83% year‑over‑year, though below expectations. Consumer confidence slipped to 93.1, a smaller drop than anticipated.
Crude‑oil volatility remains high. The IEA’s latest report shows global inventories falling around 4 million barrels per day in March and April, with supplies projected to stay severely under‑supplied until October even if hostilities cease. Goldman Sachs estimates that the current disruption has drawn down nearly 500 million barrels worldwide, potentially reaching 1 billion barrels by June.
The market discounts a 3% chance of a 25‑basis‑point FOMC rate cut at the upcoming meeting. 83% of S&P 500 companies that reported Q1 earnings beat estimates, and Q1 earnings are projected to climb 12% year‑over‑year; the technology sector’s contribution is projected at about 3%.
European stock markets opened lower, with the Euro Stoxx 50 down 1.18%, Shanghai Composite down 0.17%, and Nikkei down 0.25%. U.S. Treasury rates fell, with the 10‑year yield at 4.473%. European government bonds showed mixed movements.
Sector highlights: Chipmakers and AI infrastructure stocks led gains, with Micron Technology up 20% following a UBS price‑target boost. Airline shares rose on lower fuel costs, with American Airlines and Alaska Air gaining more than 7%. SpaceX’s IPO filings spurred gains in satellite-related stocks. Energy producers retreated on falling oil prices, while defensive health‑insurance stocks eased under broader market strength.
Notable corporate actions: Allient shares up 12% after a JPMorgan upgrade; Autoliv gained 3% following a Handelsbanken upgrade; AutoZone fell 8% after weaker-than‑expected sales; Intuit fell 4% after a price‑target cut by Mizuho Securities.