Wall Street ends higher, crude prices ease on potential US-Iran deal extension
Written by Stephen Culp
NEW YORK, May 29 (Reuters) – U.S. stocks trailed global stocks higher and the greenback retreated on Friday as investors neared the end of a holiday-shortened week on renewed hopes of progress on a peaceful resolution to the Iran war.
A narrow, tech-led rally lifted all three major US stock indexes to small gains while US Treasury yields dipped for a fourth straight time, as markets turned the page on a week marked by fears that a fragile deal will collapse amid signs of progress on a peace deal.
The S&P 500 posted its ninth straight weekly gain, its longest win since December 2023.
All three indicators posted monthly improvements.
Despite the rally, the indices were very positive at the closing bell.
The United States and Iran have agreed to extend their ceasefire and lift shipping restrictions as peace talks continue, sources told Reuters, but US President Donald Trump has yet to ratify the deal, which according to Iranian state media, has yet to be finalized.
“These managers watch the markets and like to make big moves when the markets are closed to control messages before the market has a chance to react,” said Ross Mayfield, an investment strategist at Baird in Louisville, Kentucky.
“If the memorandum of understanding is approved by President Trump and we get 60 days to reopen the Strait of Hormuz … I think 60 days should be plenty of time to come to a strong agreement,” he added.
The three-month conflict has put upward pressure on inflation, which threatens to slow growth and intensify as the war drags on.
US Federal Reserve officials are now mulling the possibility of raising interest rates to combat that growing risk.
“The market has been pricing the coin to go up (in the fourth quarter) for a couple of weeks now,” Mayfield said. “We’ll have a lot of data by then, but I don’t expect the Fed to do much of anything.”
The Dow Jones Industrial Average rose 363.68 points, or 0.72%, to 51,032.65, the S&P 500 rose 16.49 points, or 0.22%, to 7,580.12, and the Nasdaq Composite rose 55.15 points, or 6.6% to 0.2%.
European stocks closed modestly and gained for the month, marked by hopes of a deal to reopen the Strait of Hormuz. The closure of the waterway has disrupted the global economy and shocked markets.
MSCI’s index of global shares rose 5.75 points, or 0.51%, to 1,130.47.
