US stocks climbed on Thursday, with the Nasdaq Composite surging nearly 2% as a peace deal signed a day earlier by Trump and his Iranian counterpart helped pull oil lower and lift risk appetite. The S&P 500 rose 1.1%, while the Dow Jones Industrial Average added about 0.3%.
The move gave traders a reason to look past the Federal Reserve for a session. More central bank officials signaled that a rate hike could still be on the table later this year even after the Fed held policy steady on Wednesday, but lower crude prices carried the day and kept the stock market on the front foot before the Juneteenth holiday closure on Friday.
Trump framed the rally as proof the deal was already changing the market. On Truth Social, he wrote that “oil is down” after signing the agreement and later said that “the Stock Market Just Hit A RECORD HIGH, and Oil prices are ‘tumbling’ down.” His peace memo, signed Wednesday at the Palace of Versailles, called for reopening the Strait of Hormuz to commercial traffic and for the US to remove its naval blockade in the region.
That calm rests on a deal that is only partly settled. Negotiations on more protracted issues, including Tehran’s nuclear program, are expected over the next 60 days, which means the relief trade in stocks and crude can fade quickly if the talks stall. Brent crude hovered at around $79 a barrel on Thursday, West Texas Intermediate was above $75, and the drop in oil helped keep average US gas prices below $4 per gallon after a decline of more than $0.50 over the past month.
Intel was the sharpest single-name move, jumping 11% after Trump posted that Apple had agreed to work with Intel to build its processors. The post did not spell out when that work would begin or how broad it would be, but the market treated it as enough to send chip shares higher. For now, the stock market is reading the same pair of signals at once: less fear of a near-term energy shock, and more proof that the Fed is not done warning about inflation.
