Wall Street moved up at Thursday's meeting, as the willingness to take risks was strengthened after the signing of the interim peace agreement between the United States and Iran. In this way the indicators recovered from Wednesday's losses, caused by Fed's unexpectedly strict message and indications of at least one interest rate increase in the year.
Specifically, Dow Jones was strengthened by 0.14% thus remaining below the 52,000-unit mark, at 51.564. S&P 500 recorded a rise of 1,08% at 7,500 units and Nasdaq made a 1.91% jump reaching 26,517 points.
Note that the American markets will remain closed on Friday due to the Juneeth holiday, which has to do with the end of slavery after the American civil war.
Thus, in the face of the holiday but also due to the expiry of derivatives considered the largest in the history of American markets, the volume of transactions moved above the average. According to Citadel Securities data, contracts of a total nominal value of $8.3 trillion expired during the meeting.
With these performances all three key indicators completed the four-day week with profits. Dow, who "broken" the 52,000-unit barrier, won 0.8%, as did S&P 500, who thus completed the 11th profitable week within the last 12. Nasdaq was the most won with a total rise of 2%.
In the bond market, state securities stabilised after the disruption caused by Fed yesterday and the change in the forecast of turning to monetary consolidation. The return of 10 years was slightly reduced to 4.45%, but the 2 years expanded its profits to 4.18%.
Opening the Straits of Hormuz and ending the blockade of Iranian ports from the US were the first, directly positive results from the famous US-Iran understanding memorandum.
We recall that the agreement provides for the termination of military operations on all fronts, including Lebanon, and launches a 60-day period for negotiations that will lead to a final agreement. Iran also reaffirms that it will not acquire or develop nuclear weapons, while the stock of enriched material will be managed through a mechanism jointly agreed during the talks.
The provision for the complete reopening of the Straits of Ormuz without tolls or other charges for a 60-day period, which already allowed the first tankers to sail the area, is considered to be of particular importance. Development that brought about a new de-escalation of oil prices.
"Oil has now lost about 30% within just over four weeks, eliminating most of the increases that had occurred after the war began in late February," explained Russ Muld, investment director of AJ Bell, pointing out Brent is getting closer to the pre-war levels of $70.
However, some points in the agreement have raised reactions even within the Republican Party, as a fund of $300 billion is envisaged with funding from the US and Gulf countries for the reconstruction and economic development of Iran. In addition, Washington undertakes to phase out all forms of sanctions under the final agreement.
Donald Trump reacted strongly to criticism through the Truth Social platform. "These fools who believe I wasn't tough enough with Iran, the moment the stock market just recorded historic high and oil prices collapse, are either jealous, or bad people, or just fools," he wrote.
At the same time, he denied that the agreement provides for US funding of $300 billion to Tehran.
In statements earlier and Vice President J.D. Vance argued that the US would not give "neither cent" to Iran.
Despite geopolitical optimism, investors continued to evaluate Fed's decisions, which brought about a change of data and a possible shift in monetary consolidation.
FOMC has unanimously kept the basic interest rate unchanged in the range 3.50%-3.75%, as expected. However, the new forecast chart, the famous dot plot revealed a clear shift towards a stricter monetary policy.
The Fed now provides an interest rate of 3.8% at the end of 2026, compared with 3.4% in the March forecast. Nine of the 18 members of the committee argued that they see at least one interest rate increase this year, five members said they see two increases this year, while only one member still predicts a reduction.
On the basis of the dot plot, predictives in the money markets were revised by giving the possibility of increasing interest rates in September to now form close to 50%, while for October it now approaches 80%!
The meeting was the first under the chairmanship of Kevin Wars, who announced a number of committees reviewing Fed's key functions, including communication strategy, balance sheet, economic data utilisation, productivity in the era of artificial intelligence and the inflation framework.
At share level, Intel recorded a strong rise of more than 10% after Donald Trump's statement that Apple agreed to work with the company to design and produce semiconductors in the United States.
The news brought wider profits to the semiconductor industry and companies such as Nvidia, Micron Technology and Broadcom leading the Philadelphia Semiconductor Index by over 7%, to new historically high!
Marvell and Micron, as well as Alphabet and Amazon, also noted, while Apple was strengthened following the statements made by CEO Tim Cook to the Wall Street Journal that the company may increase the prices of certain products due to the rise in the cost of memorial and storage systems.
Instead, Accenture retreated about 18% after reducing forecasts for the annual revenue increase and spent more than $4 billion on acquisitions of cybersecurity companies. This development has put a strong pressure on companies providing technological services with IBM retreating over 4%.
Strong losses were also noted by Kroger, as the adjusted profits per share were below analyst forecasts, while the management referred to the pressures faced by consumers.
Second-round downhill meeting for SpaceX, as some investors went on to liquidate after the impressive three-day rally of the share after IPO. In fact, it became known that the company has been preparing presentations to investors as early as next week to proceed with a bond issue of at least $20 billion.
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