US stocks closed higher as progress on an Iran-US-Israel framework deal and SpaceX's record IPO boosted risk sentiment. Markets eye the Fed's rate decision amid easing energy prices.
Market Overview
Major US stock indices closed higher on Friday, extending weekly gains as investors reacted positively to reports of a potential framework deal between Iran, the US, and Israel. The Dow Jones Industrial Average rose 0.69% to 51,207.11, while the S&P 500 gained 0.50% to 7,431.47. The Nasdaq Composite added 0.31% to 25,888.84, and the Russell 2000 climbed 0.79% to 2,943.98.
Iran Deal and Risk Sentiment
Progress toward a peace agreement aimed at ending the conflict in the Middle East provided a boost to risk appetite. Negotiators suggested a framework deal is near, though formal approval from Iranian security factions remains pending. The potential agreement, which includes Iran's commitment to forego nuclear weapons and reduce enriched uranium stockpiles, could ease geopolitical tensions and support equity markets.
SpaceX IPO Drives Tech Momentum
SpaceX's $75 billion IPO, priced at $135 per share, contributed to the positive tone. Shares closed at $161.11, with a session high of $176.52. The offering underscored investor confidence in technology and innovation-driven sectors.
Fed Rate Decision and Inflation Outlook
Markets will focus on the Federal Reserve's policy decision on Wednesday. While rates are expected to remain unchanged, traders will scrutinize the Fed's tone and Chair Kevin Warsh's remarks. Easing energy prices, with crude oil down 6.5% this week and near $84.40, may signal moderating inflation pressures. Gasoline prices have also retreated to $4.10 per gallon, down from $4.55.
Tech and Cyclical Stock Gains
Technology and semiconductor stocks led the advance, with SanDisk surging 26.9% and Intel rising 25.6%. Lam Research and Micron gained 20.9% and 13.6%, respectively, driven by AI and data center demand. Outside tech, retail and travel stocks like Macy's, Target, and American Airlines posted strong gains, reflecting improved risk appetite.
Implications for Forex and Markets
The DXY (US Dollar Index) may face pressure if the Fed signals a more dovish stance amid easing inflation. Lower energy prices and geopolitical progress could weaken the dollar's safe-haven appeal. Traders should monitor the Fed's communication for clues on future rate cuts and the impact on global risk sentiment.
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