ORLANDO, Florida, May 6 - Hopes that talks between the United States and Iran might be reaching a successful conclusion pushed global equities to new peaks on Wednesday and sent crude prices sharply lower. The broader advance coincided with a surge in U.S. technology stocks supported by strong corporate earnings and reports of massive planned spending in the AI sector.
Emerging market assets in particular showed surprising strength in the face of an energy shock: equities are trading at record highs and bond spreads are the tightest they have been in over a decade, market participants said. The trajectory of those gains may depend on whether any deal in the Middle East materializes - if it does, the current momentum could continue; if not, that prospect represents an obvious source of uncertainty.
Market snapshot
Stocks across the globe marked new highs for a number of benchmark indices, including the MSCI world index, the MSCI emerging markets index and Asia ex-Japan equity benchmarks. The South Korean market, the S&P 500 and the Nasdaq also reached fresh peaks. In Europe and Britain the FTSE 100 climbed around 2%.
Sectors in the U.S. were broadly higher: nine of the 11 S&P 500 sectors gained ground, with technology, communications services and industrials rising by 2% or more. The energy sector fell roughly 4% on the day.
Selected individual moves cited by market participants included AMD +19%, Super Micro Computer +25%, Dell +10%, Uber +9% and Nvidia +6%. Chevron was down about 4%.
USD/JPY -0.04% NDX +2.09% UK100 +2.15% XAU/USD +2.93% XAG/USD +6.2% US500 +1.46% CVX -3.88% MSFT +0.63% DELL +10.39% ORCL +4.68% EEM +3.19% GOOGL +2.43% AMZN +0.53% NVDA +5.77% AMD +18.62% GC +2.95% SI +5.77% CL -5.93% FLG +1.31% SMCI +24.56% KS11 +6.45% 005930 +14.41% VIX +0.06% MIWD00000NUS 0.00% SPNY +0.14% XBR/USD -7.46% UBER +8.53% TNX -0.67%
Foreign exchange markets saw the dollar soften, down roughly 0.5%, while the Japanese yen moved to around 155 per dollar for the first time since the Iran conflict started. The South African rand and the Chilean peso recorded large gains, and the South Korean won had its best day so far this year.
In fixed income, yields fell across the curve. U.K. yields dropped by 10 basis points or more in parts of the curve, while U.S. yields slid about 8 basis points at the short end, resulting in a more pronounced bull flattening of the curve.
Commodities experienced wide moves: oil prices plunged by about 8%, with Brent briefly trading below $100 a barrel. Precious metals rallied, with gold up roughly 3% and silver up about 6%. The average U.S. gasoline price was noted at above $4.50 per gallon.
Key talking points
- Volatility - The VIX index, Wall Street's so-called fear gauge, ticked down to its lowest level in more than three months. It sits below the level it was at when the Iran conflict began in late February and is significantly below its peak during that period. The prevailing market dynamic is one where investors appear disinclined to buy option-based protection as prices keep moving higher.
- AI-driven chip boom - Samsung joined the $1 trillion market capitalisation club after its shares surged about 14% on Wednesday amid a broad rally in AI chip-related stocks. Samsung is the second Asian firm to reach that valuation after TSMC. The rally was spurred in part by a report that Anthropic plans to spend $200 billion on cloud services and chips with Google, and some estimates cited in markets suggest that roughly half of a potential $2 trillion cloud order book at major cloud providers is tied to two customers - Anthropic and OpenAI.
- Airlines under pressure - U.S. carriers collectively spent more than $5 billion on jet fuel in March, an increase of $1.8 billion or 56% from February. Market commentators raised the possibility that sustained high fuel costs could threaten weaker carriers, pointing to the recent failure of one low-cost U.S. airline as context. Airlines globally have faced billions of dollars in additional costs and thousands of flight cancellations; the risk is not only higher prices but also potential physical shortages if critical supply routes remain closed.
Recommended reading
- Iran says it is reviewing new US proposal after sources say sides closing in on deal
- Oil supply shock to worsen as inventories fall further even if conflict ends
- Stunning US profit strength ignites stocks’ charge to record peaks
- Curbing release of Fed meeting transcripts may improve debate, Warsh says in book
- US long bonds over 5% - buy or beware?: Mike Dolan
What could move markets next
- Further developments in the Middle East
- Energy market moves
- Australia trade data for March
- Taiwan inflation for April
- Speeches by European Central Bank Vice President Luis de Guindos and board members Isabel Schnabel and Philip Lane
- Euro zone retail sales for March
- Germany industrial orders and manufacturing for March
- Norway and Sweden interest rate decisions
- UK local elections
- Speeches by Bank of England officials Catherine Mann and Clare Lombardelli
- Mexico inflation for April and Mexico interest rate decision
- U.S. weekly jobless claims
- U.S. preliminary Q1 productivity
- U.S. consumer credit for March
- Scheduled remarks from U.S. Federal Reserve officials including New York Fed President John Williams, Minneapolis Fed President Neel Kashkari, and Cleveland Fed President Beth Hammack
- U.S. corporate earnings including McDonald's, Gilead Sciences, CoreWeave and Airbnb
Conclusion
Markets rallied on the twin impulses of easing geopolitical risk sentiment and fresh momentum in technology and AI-related stocks, while energy prices moved sharply lower. The interplay between geopolitical developments - above all the possibility of a U.S.-Iran agreement - and the energy complex will likely remain a key determinant of market direction in the near term. At the same time, the surge in AI-driven spending plans and strong corporate profits helped underpin a broad-based advance, even as some sectors, such as airlines and energy, confront distinct headwinds.