- The United States and Iran have reached a preliminary framework agreement to end the conflict and reopen the Strait of Hormuz, triggering a significant drop in crude oil futures prices to their lowest closing level since March, significantly alleviating deep concerns about rising inflation in global markets on a macro level.
- Wall Street's three major stock indices collectively closed higher for the third consecutive trading day, with the Nasdaq Composite Index surging over three percent, marking the largest single-day gain in nearly two and a half months. The Philadelphia Semiconductor Index also hit a record high, driven by strong buying in technology stocks.
- Global macro investors are intensely focused on the Federal Reserve's policy meeting this Wednesday, which will be the first interest rate decision chaired by the new Federal Reserve Chairman Walsh, who replaced Powell last month. The market remains highly sensitive to the marginal probability of another rate hike before the end of the year.
Geopolitical Easing Triggers Energy Revaluation
Boosted by the positive news of the preliminary agreement between the United States and Iran, the pressure on major global commodities and capital markets has been significantly relieved. West Texas Intermediate crude oil futures prices fell sharply by 4.9% in a single day, reaching their lowest level since March this year. Although the framework agreement involving the reopening of the Strait of Hormuz is expected to be formally signed in Switzerland this Friday and does not fully cover core sensitive issues such as the nuclear program, its effect on releasing the risk premium of oil supply chain disruptions is immediate. The significant pullback in oil prices directly reduced the energy input cost expectations of micro-listed companies, with the S&P 500 energy sector falling by 3.6%, making it the worst-performing sector of the day. Meanwhile, traditional transportation stocks such as airlines and cruise lines, which are highly sensitive to energy costs, generally strengthened, with United Airlines rising by 3.9%, and Norwegian Cruise Line and Carnival Corporation also achieving significant gains.
Strong Rebound in Tech Sector and IPO Boost
As falling oil prices eased cost-driven inflation's erosion of corporate profits on a macro level, capital market risk appetite underwent a marginal reassessment, prompting investors to flock back to growth assets led by information technology. The Nasdaq Composite Index surged by 3.07%, recording the largest single-day percentage gain since March 31. The information technology sector led the performance among the eleven major sectors of the S&P 500 Index, rising by 3.4% overall. The Philadelphia Semiconductor Index also hit a record closing high, rebounding strongly for three consecutive trading days after a more than 12% pullback from recent highs. Among individual stocks, chip giant Nvidia rose by 3.5%, and Micron Technology climbed by 10.5% after several brokerage firms significantly raised their target prices. Additionally, Space Exploration Technologies Corporation continued to be favored by capital on its second day of listing, with its stock price soaring nearly 20%, pushing its market value past the $2 trillion mark, injecting confidence into the potential listing plans of related tech giants.
Macro Policy Focus Shifts to New Fed Chairman
Despite a short-term phased decline in geopolitical risks, global macro investors have shifted their core focus to the upcoming Federal Reserve policy statement to be released this Wednesday. Notably, this meeting will be chaired for the first time by the new Federal Reserve Chairman Walsh, who replaced Powell last month. The inflation data released in May showed that the previous rise in energy costs has been partially passed on to consumer prices, adding uncertainty to the future monetary policy path. Currently, federal funds rate futures traders generally expect the Federal Reserve to maintain the current interest rate range at this week's meeting. However, according to the CME Group's FedWatch tool, due to the persistence of core inflation, market participants estimate a nearly 42% probability of another 25 basis point rate hike by the end of the year. If core inflation fails to show a clear downward path, the risk of re-evaluating future policy rates may rise again.
Cross-Industry Valuation Divergence and M&A Volatility
Against the backdrop of a systemic rise in risk appetite, the total trading volume across all U.S. exchanges reached 21.29 billion shares, slightly above the daily average of the past 20 trading days, with the number of advancing stocks on the New York Stock Exchange and Nasdaq market significantly exceeding declining stocks. The volatility index, which measures market panic, fell for the third consecutive trading day, further confirming the relief effect of geopolitical easing on market sentiment. However, at the individual stock level, specific merger and acquisition events triggered sharp asset price divergence. Fox Corporation announced plans to acquire a streaming platform company for $22 billion, causing its stock price to plummet by 16.8% in a single day due to market concerns about its capital expenditure and financial integration risks, while the stock price of the acquired company Roku also came under pressure and slightly declined. This indicates that even in a bull market environment with overall abundant macro liquidity, specific operational decisions can still lead to particular valuation adjustments due to idiosyncratic risks.
