Markets react cautiously to Trump's mixed signals on Iran deal progress, while tech stocks rally ahead of SpaceX's public trading debut.
Market Mood Stabilizes Amid US-Iran Deal Ambiguity
European traders opened the session with a steadier tone as investors parsed conflicting signals from US-Iran negotiations. While US President Donald Trump hinted at a near-final agreement, Iranian sources disputed claims of a breakthrough, leaving markets in a wait-and-see posture.
Trump stated that "final points have been approved by all parties" and a signing announcement would follow "shortly," yet Israeli officials noted Prime Minister Netanyahu's surprise at the sudden shift. Iranian state media countered, asserting that Supreme Leader Mojtaba Khamenei has not endorsed the US proposal. The Strait of Hormuz closure remains in place, with the US military confirming the downing of two Iranian drones near the critical waterway.
Equities Rally on Reduced Geopolitical Tension
US equities surged on Thursday, with the Nasdaq Composite climbing 2.5% as tech shares dominated gains. The rally coincided with a 1.6% drop in WTI crude oil to $86.30, easing concerns over supply disruptions. S&P 500 and Nasdaq futures edged 0.2% higher in early European trade, signaling continued optimism.
The upcoming public debut of SpaceX, priced at $135 per share, added to the bullish momentum. Analysts expect an "IPO pop" despite elevated valuations, with the aerospace giant's entry into public markets likely to overshadow geopolitical headlines in the near term.
Forex Implications: Dollar Holds Steady
The US dollar index (DXY) maintained a relatively stable profile after minor overnight losses, reflecting cautious optimism. Currency markets are likely to monitor developments in the Middle East closely, as any escalation could reignite volatility in safe-haven assets.
Traders should note that even a preliminary deal with Iran may not immediately resolve tensions in the Strait of Hormuz, a critical chokepoint for global energy shipments. The 60-day framework agreement period poses risks for renewed uncertainty, particularly if nuclear negotiations stall.
Risk Sentiment and Technical Outlook
Global risk appetite remains fragile but resilient, supported by easing energy prices and tech-driven equity gains. Bond yields retreated alongside oil, with the 10-year Treasury yield slipping below 4.2%. However, the dollar's stability suggests markets are pricing in a gradual de-escalation rather than a definitive resolution.
Technical indicators for major currency pairs, including EUR/USD and GBP/USD, point to consolidation near recent highs. The DXY's performance will hinge on Friday's US CPI data and any fresh updates on the Iran negotiations.
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