Stocks Increase as S&P 500 Aims for Third Week of 3% Gain – Europe Market Wrap
Equities are rising as speculation rises that a solution to end the war between the US and Iran is near, driving traders to take on more risk following an exceptional rally.
S&P 500 futures climbed 0.2% after the benchmark set two consecutive record highs. The index is poised for a third week of gains of more than 3%, a startling reversal following emerging evidence that the US and Iran are attempting to de-escalate their confrontation, which has roiled energy markets. Optimism about AI and strong profitability have contributed to the momentum.
Brent fell 3.1% to $96 a barrel after Trump claimed that Iran had made significant concessions in negotiations with the US. The Dollar remained near a February low. Global bonds were neutral, with the 10-year Treasury yield falling 2 bps to 4.30%.
It only took 11 days for the S&P 500 to move from oversold to overbought territory on Thursday. That was only surpassed by a rally in 1982. The quick change in momentum can be attributed to hedge unwinding, systematic purchasing, and short covering by hedge funds in macro instruments.
In the UK, the yield on 10-year gilts fell one basis point to 4.84% following Thursday’s increase. New information surrounding PM Starmer’s selection of Mandelson as US ambassador have raised concerns about his hold on power. The Pound remained very stable.
