Ceasefire Boosts S&P, Nasdaq to Records; Core PCE Jumps

U.S. equity benchmarks reached fresh records after Washington and Tehran agreed to extend a ceasefire, lifting investor appetite for risk and driving gains in technology and AI-related stocks. The S&P 500 climbed 0.6% to close at 7,563, while the Nasdaq 100 outperformed with a 0.8% advance to a new all-time high. Technology rose about 1.4% and healthcare gained 1.3%; defensive sectors lagged, with consumer staples down 0.6% and utilities off 1.0%. European bourses fell, with the FTSE 100 down 0.7% and the DAX down 0.3%.

The Bureau of Economic Analysis reported April headline PCE inflation at 3.8% year-over-year, up from 3.5% in March. Core PCE, which excludes food and energy, rose to 3.3% year-over-year, above the core CPI reading of 2.8%. Market pricing for Federal Reserve rate cuts has moved later, reflecting the hotter core PCE print under new Fed Chair Kevin Warsh.

U.S. Treasury Secretary Scott Bessent confirmed negotiators view a permanent end to the three-month conflict as “within reach” if Iran disposes of its uranium stockpiles and fully reopens the Strait of Hormuz. The extended truce reduced immediate geopolitical risk for markets.

Fixed-income markets responded with slightly lower yields. The 10-year U.S. Treasury note fell about three basis points to roughly 4.45% and the sovereign yield curve showed a mild bull-flattening. The U.S. dollar index eased about 0.2%, pulling USD/JPY back from the 160 level and helping risk-sensitive G10 currencies such as the New Zealand and Australian dollars outperform.

Commodities diverged: Brent crude traded near $92.41 a barrel and WTI around $88.52, both close to six-week lows. Spot gold rose 0.9% to trade near $4,496 an ounce as yields softened.

Corporate news reinforced demand for AI infrastructure. Anthropic closed a $65 billion funding round that valued the company at $965 billion and is tracking toward a reported $50 billion annualized revenue run-rate. Snowflake rose as much as 35% after announcing a $6 billion deal with Amazon and raising its sales forecast. Dell Technologies jumped about 40% in after-hours trading following strong quarterly results.

Some institutional investors signaled signs of budget fatigue in AI spending. Portfolio managers reported that one large software firm reduced internal licenses for a generative AI product and that at least one tech company had used its planned AI coding capital for 2026.

U.S. household finances showed strain: the personal savings rate fell to 2.6% in April, near a 18-year low, while retail gasoline prices approached $5 per gallon. Corporate profit margins remained near record highs.

In Asia, markets initially dipped on sticky yields but later rallied. Japan’s Nikkei 225 and South Korea’s KOSPI each reached record highs, and the Hang Seng and China A50 posted gains. In labor news, advanced chip workers at Samsung Electronics secured a long-term pay package that includes bonuses up to $416,000.

Investors will monitor upcoming data and central bank commentary for further direction, including Japan consumer confidence, Germany’s preliminary harmonized inflation reading and remarks from Federal Reserve officials, along with any new developments in U.S.-Iran negotiations.