Morning Brief: US-Iran Draft Ceasefire Extension Reached; All Three Major US Indexes Hit Record Highs

Key Snapshot

🕊️ Sources say the US and Iran have agreed on a draft deal to extend the ceasefire by 60 days and restore Strait of Hormuz shipping, pending Trump’s approval.

📈 All three major US stock indexes hit all-time highs: S&P 500 +0.58% to 7,563.63; Nasdaq +0.91%.

📊 US Q1 GDP revised down to 1.6% (below expectations); April PCE rose 3.8% YoY, a three-year high.

🤖 Dell Q1 AI revenue surged 757%, triggering an after-hours jump of nearly 40%; Anthropic valued at $965 billion, surpassing OpenAI.

I. Market Outlook

Core Events

Sources told Reuters that the US and Iran have reached a draft agreement to extend the ceasefire by 60 days and restore free navigation in the Strait of Hormuz, pending Trump’s approval. Iranian state media said the deal is not yet final.

US Q1 GDP was revised down to 1.6% (vs. 2% expected). April PCE inflation hit 3.8% YoY, the highest in three years. The “trimmed mean” inflation gauge favored by Walsh rose 2.3% YoY in April (down from 2.4% in March), though its compiler warned it understates underlying inflation trends. Fed hawkish rhetoric intensified.

Market Reaction

All three major US indexes closed at record highs: S&P 500 +0.58% to 7,563.63; Nasdaq +0.91%. WTI crude +0.25% to $88.90/bbl; Brent -0.62% to $93.71/bbl. Spot gold +0.95% to $4,496. USD index -0.3% to 99. Bitcoin -1.14% to $73,590.

Exclusive Insight

Markets are pricing a combo: “US-Iran deal likely + weak data = rate-cut expectations return.” A lower GDP print + higher PCE would normally signal stagflation, but ceasefire hopes completely overshadowed it.

The divergence between Walsh’s trimmed mean and headline inflation is fueling Fed division: hawks argue for hikes, while Walsh insists AI will curb inflation.

II. Overnight Market Action

Summary

US-Iran ceasefire news drove US stocks to new highs; PCE data was largely ignored.

US Equities

• Dow Jones: +24.69 pts (+0.05%) to 50,668.97
• S&P 500: +43.27 pts (+0.58%) to 7,563.63
• Nasdaq: +242.74 pts (+0.91%) to 26,917.47

💡 All three indexes hit record highs. Markets focused on the ceasefire, not weak data. Healthcare and tech led gains; semiconductors +1%.

European Equities

• STOXX 600: -0.5% to 625.11
• UK FTSE 100: -0.75%

💡 European stocks lagged. EU reaction to US-Iran news was slower, while ECB hike expectations weighed on valuations.

Fixed Income

• US 10Y yield: -2.4 bps to 4.457%
• US 30Y yield: -2.4 bps to 4.987%
• US 2Y yield: -0.8 bps to 4.025%

💡 Long-end yields fell on weak GDP + ceasefire hopes. 10Y below 4.46%, 30Y under 5%.

Commodities

• WTI July crude: +0.25% to $88.90/bbl
• Brent July crude: -0.62% to $93.71/bbl
• Spot gold: +0.95% to $4,496.21/oz
• Spot silver: +1.37% to $75.6572/oz

💡 WTI rose slightly, Brent fell — reflecting ongoing Hormuz risk premium in Brent. Gold rebounded nearly 1%.

Currencies

• USD index: -0.3% to 99
• USD/CHF: -0.38% to 0.7838
• USD/JPY: -0.18% to 159.23

💡 USD broke below 99 on easing geopolitics + weak GDP. JPY recovered from 159.51 but stayed above 159.

Crypto

• Bitcoin: -1.14% to $73,590
• Ethereum: -0.83% to $2,008.50

💡 Bitcoin decoupled from record stocks. Funds rotating from crypto to tech.

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II. Macro News

📊 US Q1 GDP revised down to 1.6% (exp. 2%); consumption weak, investment stalled

April PCE: 3.8% YoY (3-year high); core PCE 3.3% YoY. Durable goods orders +7.9% MoM, but core capital goods missed.

Insight: Lower GDP + higher PCE = stagflation signal, but markets ignored it on ceasefire hopes. Weak core capital goods point to soft real demand. If a deal is signed, focus shifts from geopolitics to recession risks.

📉 Walsh’s trimmed mean inflation: +2.3% YoY in April (prev. 2.4%); compiler says it understates inflation

Analysts doubt the slowdown is real. Fed hawks challenge Walsh’s “AI disinflation” view.

Insight: Split between Walsh and hawks is the Fed’s key rift. Trimmed mean excludes outliers, which may understate inflation amid volatile energy prices. June’s meeting will be Walsh’s first major stress test.

🏛️ ECB held rates steady in April by narrow margin; June hike expectations rise

Minutes showed a slim majority favored no change. Policymakers warned energy prices may stay elevated.

Insight: “Narrow margin” signals deeper ECB division. A June hike is almost certain; July depends on second-round inflation effects.

IV. Corporate News

🤖 Anthropic launches Claude Opus 4.8: more “honest”, adjustable reasoning, multi-agent coordination

H-round valuation hits $965B, surpassing OpenAI.

— “Coordinating hundreds of agents” is Anthropic’s enterprise edge. The valuation premium reflects confidence in its clearer monetization path vs. OpenAI.

💻 Dell Q1 revenue +88%, AI revenue +757%; full-year guidance raised, after-hours +~40%

— 757% AI growth is the strongest AI hardware print since Nvidia. Dell is shifting from “PC maker” to “AI server provider.” The 40% rally shows AI infrastructure enthusiasm remains strong.

V. Today’s Key Focus

📊 US April goods trade balance: check for narrowing deficits on lower oil prices.

🇩🇪 Germany May CPI: impacts ECB June hike sizing.

🇯🇵 Japan May Tokyo CPI: leading gauge for national inflation amid yen weakness.

🇮🇳 India Q1 GDP: verify emerging-market resilience.