US stock indices had a difficult start to last week. This followed a hefty selloff across tech after some disappointing forward guidance from Broadcom and stronger-than-expected payroll numbers. The latter boosted expectations that the Federal Reserve would be forced to raise rates this year, possibly by as much as 50 basis points. Then there were clashes between the US and Iran, while Israel attacked targets in Lebanon, which made any progress towards a peace deal look unlikely.
But sentiment turned more positive on Friday afternoon following comments from Pakistan’s Prime Minister Shehbaz Sharif. He said that the US and Iran had agreed on the text of a deal. This has been confirmed over this weekend, and both sides are expected to sign the agreement this Friday in Switzerland.
Crude oil slumped, as did the dollar, on the news, while equities caught a bid. There are still some major issues to consider, such as Iran’s enriched uranium, and there’s still a danger that Israel hasn’t finished with Hezbollah in Lebanon. But the overall tone has improved dramatically, and the Strait of Hormuz could soon be reopened.
US stock index futures were sharply higher this morning, with tech stocks at the vanguard of the move. There were some hefty gains across the chip sector, particularly in the ‘second division’. This had suffered a flurry of profit-taking recently after a stunning rally between the end of March and the beginning of this month.
But buyers rushed back in this morning, giving the sector a boost. Micron Technology was up 7.7%, while SMC and Marvell Technologies added 5.8% and 5.5%, respectively. AMD tacked on a healthy 4.8% while NVIDIA lagged, but still managed a 2.3% gain.
Source: TN Trader
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