US-Iran Tensions Subside Temporarily, S&P and Nasdaq Hit New Highs

The temporary ceasefire agreement between the US and Iran without any significant escalation in the situation, combined with strong US macroeconomic data, has led to a cooling down of market risk aversion.

Oil prices have generally retreated, US debt yields have slightly decreased, and US stocks especially the S&P, NASDAQ, and semiconductor indices ended at new highs. After the US stock market closed, AMD released a robust business outlook, leading to an 8% surge in AMD's after-hours trading.

US Secretary of Defense Hugseth said on the 5th that the ceasefire with Iran has not yet ended. US Secretary of State Rubio characterized the military escort operations in the Strait of Hormuz as "defensive," emphasizing that the US will only retaliate when attacked.

This statement effectively suppressed market concerns about the complete loss of control over the situation in the Middle East. WTI crude oil futures fell by 3.6% to $102.59 a barrel, erasing all gains from the previous trading day. Spot Brent crude oil prices fell to a one-week low.

At the end of the New York market, the decline in oil prices narrowed slightly. The UAE Ministry of Defense posted on social media on the 5th, stating that the UAE's air defense system is currently dealing with missile and drone attacks, raising market concerns that supply chain disruptions may last longer than expected.

Brock Weimer of Edward Jones stated that the key factor supporting investor sentiment is the avoidance of further deterioration of tensions in Iran.

Chris Senyek of Wolfe Research pointed out that his base case scenario is that the US and Iran will reach a near-term resolution, after which the Strait of Hormuz will reopen and energy prices will subsequently fall.

The S&P 500 Index again reached an all-time high on Tuesday, but in addition to the fading risk-avoidance sentiment, analysts believe that today's rise in US stocks is supported by the US micro and macroeconomic situation:

• The earnings growth for the first quarter of 2026 far exceeded the high expectations so far this quarter, and analysts' expectations have been on the rise.

• Strong exports, better-than-expected new home sales, a record surge in hiring numbers (excluding the impact of the COVID-19 pandemic), and a stable services PMI index have driven the US macroeconomic surprise index higher.

The technology sector, especially the semiconductor sector, became the biggest winner on Tuesday, with news from Apple's supply chain boosting the sector.

Apple is considering cooperating with Intel and Samsung to produce main device chips. The news stimulated Intel's stock price to soar by 13%, and storage stocks rose in tandem, with Micron Technology rising by 11% and SanDisk by 12%.