US stock benchmarks are aggressively dancing back toward uncharted territory as a massive wave of geopolitical optimism sweeps across the trading floor, right ahead of a long weekend for the US, for Memorial Day.
Traders are feeling optimistic thanks to the ongoing diplomatic efforts, quickly moving past the doubts they had yesterday – The main reason for today’s strong relief rally is a Sky News report confirming that an agreement regarding the nuclear issue was reached. This diplomatic step is meant to help secure a formal end-of-war deal, easing tensions in the Middle East and giving risk assets the hope they need.
President Trump is highlighting the strong rally, signaling that the administration views this as a clear path to new all-time highs – The threat of renewed warfare that worried markets last week is quickly fading.
Oil prices are falling, breaking below key support levels and easing the inflation concerns that had worried bond markets. As geopolitical risks decrease, institutional investors are moving back into riskier stocks, fueling a strong bullish trend.
The tech-focused Nasdaq is leading the way, setting new records as semiconductor and Magnificent 7 stocks continue to rise.
The S&P 500 is also regaining strength as overall market sentiment improves. At the same time, the Dow Jones Industrial Average is moving higher, breaking through resistance and heading back toward its prior record (Futures actually broke their prior record).
With immediate geopolitical risks fading, the market is also appreciating the sworn-in from Kevin Warsh.
Now, let’s take a look at the intraday charts and trading levels for the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500.
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