US Open: Hope for De-escalation Bolsters Wall Street Bulls

The opening of the US stock market session began with a strong upward impulse driven by emerging hopes for an end to the conflict in Iran. These gains are further supported by a recovery in technology companies following their earnings reports.

Brent crude oil plummeted by nearly 3%, falling to around $107 per barrel, while WTI lost as much as 5%, dropping to $100, following reports that Iran responded to US amendments regarding an agreement to end the ongoing conflict. Iran's Foreign Minister indicated that all domestic efforts are currently focused on ending the war. Conversely, Iran's desire to gain control over the Strait of Hormuz may remain unacceptable to the US side.

The market optimistically welcomes any chance of de-escalation, even though the situation remains fragile and the blockade of Iranian ports is still being maintained. This easing of tension, combined with solid results from tech companies, pushed major indices to new highs. However, it is worth noting a significant disappointment in the ISM Manufacturing index, which remained at the previous month's level despite an extreme increase in the price-related sub-index.

Technical Look at US500

The S&P 500 index continues its strong ascent, gaining approximately 0.8% at the session open. Similar movements are visible on the US500 futures contract, which currently reaches approximately 7,300 points. Yesterday's close above 7,200 points paved the way for further appreciation, primarily fueled by the technology sector. The VIX volatility index has fallen to 16.70, its lowest since early February, confirming buyer dominance and a temporary calming of sentiment. However, investors should remain alert, as today's weekly option expiry could bring elevated volatility before the market close.

The US500 is rising today to nearly 7,300 points on hopes of ending the conflict. This level coincides with the 138.2 retracement of the previous downward wave. Since the end of March, there has been a rebound of nearly 15%. If the recent consolidation is viewed as a flag formation, the latest breakout could target the 7,500–7,700 point range.

Corporate News

• Apple (AAPL.US): The share price is rising by over 5% following the publication of financial results and strong revenue forecasts for the third quarter that exceeded analyst expectations. The company managed to reassure the market despite warnings about rising memory chip costs and persistent Mac computer shortages.
• Roblox (RBLX.US): A major collapse in the gaming company's shares, which are losing over 18%. The cause is a report showing a lower-than-forecast number of daily active users (DAU).
• Twilio (TWLO.US): The company is soaring over 15% after first-quarter revenue beat the market consensus.
• Moderna (MRNA.US): Shares gained over 7% in pre-market trading due to first-quarter financial results that significantly beat expectations. However, during the first hour of trading, the shares lost nearly 4% in value.
• Memory Sector (Sandisk, Western Digital): Despite good results, both companies' share prices fell at the start of the session, but a recovery is now visible; Sandisk is up about 4%, and WDC reduced its loss from -7.5% to -0.2%. Investors initially sold shares due to excessive expectations, but recovery linked to peace hopes sent demand back to these market winners.
• Cboe Global Markets (CBOE.US): Recording a 9% increase following announcements of cost reductions and plans to reduce the workforce by approximately 20%.
• Exxon (XOM.US) and Chevron (CVX.US): Losing just over 1% after Q1 financial results. While the companies showed strong results, they face limited production and foreign capacity due to the closure of the Strait of Hormuz. Notably, since these companies operate primarily in the US, the opening of the Strait could potentially dampen price increases and future profits.