Peace Hopes Lift Stocks as Oil Retreats

Stocks are rallying this morning while crude oil and gasoline are under pressure, with investors reacting positively to reports that the US and Iran may be moving closer to a potential peace agreement. Optimism appears to be tied to indications that direct talks between the two countries have been taking place, President Trump calling off planned attacks, and Iran confirming that discussions are underway, although no deal has been reached.

It is also Launch Day for SpaceX shares following the completion of the largest IPO in history. The offering was priced at $135 per share, raising $75 billion and giving the company a notional market capitalization of approximately $1.75 trillion.

There are no major economic or earnings reports this morning.

US index futures are pointing higher, with NASDAQ futures up 0.6% and Dow futures up 0.7%.

Global equity markets are also broadly positive. In Asia, the Nikkei rose 2.0% and the Hang Seng gained 1.9%. In Europe, the DAX is up 1.5% while the FTSE is ahead 1.1%.

Commodity markets are mixed. Crude Oil is down 3.2%, trading near $85.00 per barrel, while Gasoline is down 2.7%, trading near $3.00 per gallon. Gold is up 2.8%, Copper is up 1.9%, and Silver is up 4.9%.

In rates, the US 10-year Treasury note yield has slipped below 4.50%, while the US 30-year Treasury note yield has dropped back under 5.00%. The US Dollar is mixed today, up slightly against major currencies but down against metals. The Euro is down 0.1% and the Loonie is down 0.2%.

Looking ahead, retail sales reports from the US, Canada, the UK, and China are scheduled for next week. The Fed, Bank of Japan, Bank of England, and Reserve Bank of Australia are also holding meetings, with no interest rate changes expected.

US markets are closed next Friday for the Juneteenth holiday.

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