S&P 500 Hits Record High as Peace Hopes Fuel Risk Rally – Comments from Century Financial

The rally was primarily driven by sentiment rather than fundamentals, as investors priced in the possibility of a resolution to the conflict. However, the market is approaching a critical juncture. Investors will likely need to see firmer and more concrete details of any agreement before pushing stocks meaningfully higher into the weekend. For now, Asian equities have caught up with Thursday’s gains, though US equity futures are pointing to a relatively flat open, suggesting markets are in a holding pattern awaiting the next catalyst.

On the individual stock front, the session’s top gainers were GLW up 12%, SCMI surging 24.54%, DVA gaining 23.46%, and AMD climbing 18.61% following its strong earnings beat the prior evening. ARM also reported results that surpassed Wall Street expectations on both revenue and profit, with a 20% year-over-year revenue increase anchored by surging demand for ARM-based CPUs in AI data centers. The AI infrastructure theme continues to be the market’s most powerful earnings driver.

The focus now turns to the labor market. Friday’s April NFP is the key release, with consensus at +73K, down sharply from March’s +178K. A print below 50K would reignite recession fears, while a reading above 100K would likely put those concerns to rest through the summer. On the earnings front, Coreweave, Cloudflare, Rocket Lab, Datadog, and AAOI are among the notable names reporting today.

Technically, SPX has broken convincingly above the prior resistance at 7,271 and is now trading at the upper limit of its Bollinger Band, a sign of strong momentum but also one that warrants caution on the near term. A bullish headline on the peace deal front could propel the index toward 7,400. On the downside, support is seen at 7,200, which coincides with the 9-day SMA. The RSI sits at 77, firmly in bullish territory.

U.S. Dollar Index

The U.S. Dollar Index is trading flat, near 98.02 in early Asian trade after slipping by 0.5% in the previous session, erasing war gains, as easing safe-haven demand limits the greenback’s upside. Optimism surrounding a potential U.S.-Iran agreement has pressured oil prices lower, with both Brent and WTI falling by over 7% yesterday. This has reduced inflation fears and softened expectations for a prolonged hawkish Fed stance, weighing on the dollar. However, uncertainty remains elevated after President Trump warned Iran of further escalation if negotiations fail, which may continue to provide some underlying support to the dollar. Markets now await this week’s U.S. nonfarm payrolls report for directional clues.

The yen remains in focus after a sharp intraday rebound fueled speculation of further intervention by Japanese authorities. USD/JPY dropped toward 155 before bouncing back to around 156.30, as officials in Japan repeated that they are ready to act against speculative moves. Expectations of additional support for the yen may keep volatility elevated, although higher U.S. Treasury yields and firm oil prices continue to provide underlying support for the pair.

Meanwhile, EUR/USD strengthened in yesterday’s session as easing geopolitical tensions reduced demand for the dollar. The euro continues to show resilience within the broader 1.165–1.185 range, with markets increasingly viewing any de-escalation in the Middle East as supportive for further upside in the pair.

In its current form, the proposed memorandum includes a gradual lifting of Iranian restrictions on shipping through the Strait of Hormuz and of the U.S. naval blockade on Iranian ships, the Axios report said. However, the oil flows and production restarts are unlikely to normalise soon. Also, President Trump suggested that an agreement to end the conflict with Iran could still falter. Given the previous claims of nearing a peace deal and the resulting outcome that didn’t meet expectations, the current memorandum’s outcome is also sceptical. EIA data reported yesterday showed crude oil inventory draws of 2.3 million barrels, slightly lower than consensus. US exports of oil products rose to a record high last week, at 8.2 million barrels a day. This was driven by record distillate fuel exports. As a result, domestic diesel stockpiles are at their lowest since 2005. Markets appear to be weighing positive geopolitical headlines more than inventory drawdown data, and hence, the bias for today is moderately bearish.

Technically, the first major resistance level is around $98-$100, which includes the 20-day EMA and 50% Fibonacci resistance drawn from the close on 17th April to 30th April. The next resistance could be near yesterday’s high at $104. On the downside, initial support could be around $93 (confluence of 61.8% Fibonnaci retracement and 50-day EMA), followed by $90 (yesterday’s low).

The yellow metal is poised to rise in the short term as the US Dollar and US Treasury yields fall, driven by easing tensions in the Middle East and declining safe-haven demand. The dollar index has fallen below the 98 mark, while the 10-year Treasury yield has fallen below the 4.35% mark, after briefly rising above 4.46% level. This has also occurred as the odds of a 25 bps rate hike have almost halved, from 26.1% a day ago to 13.7%, according to the CME FedWatch Tool, benefiting the non-yielding precious metals. The market’s focus may now shift to tomorrow’s U.S. nonfarm payrolls report, which could be a key catalyst in determining the path of interest rates. Weaker-than-expected data could support a more dovish Federal Reserve and buoy gold prices.

Technically, gold prices seem to be regaining strong bullish momentum, with the daily RSI sloping upward and crossing above the 58 level, and prices breaking above all key EMAs, including the 50-day EMA around $4728 recently. Prices have also crossed the 200-EMA on the 4-hour chart near the $4712, indicating a strong short-term market structure. Meanwhile, silver prices have crossed above all key moving averages as well, but are trading near a downward sloping trendline resistance connected by the highs of 10th March and 17th April. On the downside, support could come from today’s session lows near the $77 mark.