Markets Climb Ahead Of Long Weekend
Major stock indexes rose on Friday while Treasury yields eased, as investors weighed the possibility of a near-term agreement to end the U.S. and Israeli war with Iran.
Oil prices also gained, reflecting the uncertainty that still surrounds the negotiations. Although diplomatic efforts have intensified, investors remain alert to unresolved issues that could keep energy markets volatile.
Wall Street Extends Its Rally
On Wall Street, the Dow Jones Industrial Average hit a record high for the first time since the Iran war began. The S&P 500 was also on track for its eighth consecutive weekly gain.
The Dow rose 369.12 points, or 0.73%, to 50,654.78. The S&P 500 gained 43.59 points, or 0.58%, to 7,489.09, while the Nasdaq Composite advanced 164.55 points, or 0.63%, to 26,457.65.
AI Demand Supports Equities
Stocks have continued to benefit from booming demand for companies tied to artificial intelligence, even as investors remain concerned about the economic fallout from the conflict in the Middle East.
MSCI’s global stock gauge rose 0.65% to 1,114.10, while Europe’s STOXX 600 index gained 0.8%. The broad move higher reflected investor confidence that the conflict may eventually be resolved, even if major uncertainties remain.
Talks With Iran Show Progress
U.S. Secretary of State Marco Rubio said the United States has seen some progress toward a deal with Iran, but added that more work is needed. Iran’s foreign minister also met Pakistan’s interior minister on Friday to discuss proposals to end the war, according to Iranian media.
However, key sticking points remain. The United States and Iran are still divided over Tehran’s enriched uranium stockpile and control of the Strait of Hormuz, a vital route for global energy shipments.
Treasury Yields Ease After Volatile Week
The yield on the benchmark 10-year Treasury note fell 3.4 basis points to 4.552%. Earlier in the week, a bond selloff pushed yields to multi-month and multi-year highs.
The 10-year yield reached its highest level since January 2025 on Tuesday, as investors worried that energy disruptions could feed into core consumer prices and force tighter monetary policy.
Oil Rises But Heads For Weekly Loss
Oil prices moved higher on Friday but remained on track for a weekly decline. U.S. crude rose 1.34% to 97.64 dollars per barrel, while Brent climbed 1.48% to 104.08 dollars per barrel.
Energy remains one of the most important variables for markets. If supply disruptions persist or the Strait of Hormuz remains under pressure, higher oil prices could keep inflation elevated and complicate central bank policy.
Consumer Sentiment Hits Record Low
Investors also digested a survey showing U.S. consumer sentiment fell to a record low in May. Surging gasoline prices have intensified anxiety over affordability, adding pressure to households already facing higher costs.
The weak sentiment reading reinforced concerns that the conflict’s economic impact may spread beyond energy markets and begin affecting consumer behavior more broadly.
Dollar Holds Near Six-Week Highs
The dollar remained near six-week highs as traders monitored the war talks and assessed whether the Federal Reserve could raise interest rates if inflation continues to accelerate.
The dollar index rose 0.12% to 99.32. The euro slipped 0.15% to 1.16 dollars, while the dollar strengthened 0.1% against the Japanese yen to 159.12. Spot gold fell 0.6% to 4,514.12 dollars an ounce.
Turkey Rebounds After Political Shock
Turkey’s financial markets rebounded after being rattled by political moves against the country’s main opposition party. Istanbul’s BIST 100 index rose 4.5%, recovering from a 6% plunge on Thursday that had triggered a trading suspension.
For global investors, Friday’s session reflected a cautious return to risk appetite. Stocks rose, yields eased and deal hopes improved sentiment, but oil, inflation, geopolitics and weak consumer confidence remain major risks heading into the long U.S. weekend.
