Stock Market Update

[BRIEFING.COM] Stocks are riding a wave of enthusiasm after the U.S. and Iran agreed on a two-week ceasefire just before last night's negotiation deadline. The S&P 500 (+2.6%), Nasdaq Composite (+3.1%), and DJIA (+2.7%) each reclaimed their respective 200-day moving averages amid a sharp retreat in oil prices.

There is still a degree of fluidity to the situation, as Israeli strikes against targets in Lebanon drew the ire of Iran and threatened to upend the agreement. However, Bloomberg reported that the U.S. and Iran are set to hold talks to seek a more permanent end to the war soon, marking a much more conciliatory tone in comparison to yesterday's rhetoric.

Crude oil is currently down $17.77 (-15.7%) to $95.18 per barrel amid hopes that tanker traffic through the Strait of Hormuz will soon return to some level of normalcy.

While the retreat in oil prices weighs heavily on the energy sector (-4.9%), it has given the other ten S&P 500 sectors a runway to chart some impressive gains amid a definitive risk-on rally.

Oil-sensitive stocks such as airlines and cruise lines are among the outperformers, contributing to gains across the industrials (+3.7%) and consumer discretionary (+3.4%) sectors. Delta Air Lines (DAL 69.48, +3.86, +5.88%) trades higher after topping earnings estimates, with the company emphasizing that it is not seeing any slowdown in summer travel demand despite higher ticket prices and macro headwinds.

Elsewhere, mega-cap and tech names are also buoyed by the improvement in risk sentiment.

The communication services sector (+4.4%) now holds the widest gain, with Meta Platforms (META 628.05, +53.00, +9.22%) a mega-cap standout after the company unveiled Muse Spark, its first step toward personal superintelligence with multimodal, multi-agent AI.

In the information technology sector (+3.0%), strength is broad, and chipmakers such as Intel (INTC 58.64, +5.74, +10.84%) are seeing a continuation of yesterday's strength, pushing the PHLX Semiconductor Index 6.0% higher.

Outside of the S&P 500, the Russell 2000 (+3.1%) and S&P Mid Cap 400 (+3.1%) hold gains comparable to those across the major averages.

Today's rally reflects a sharp shift in tone as easing geopolitical tensions and falling oil prices support risk assets. However, with the situation still fluid, markets remain highly sensitive to any developments that could threaten the durability of the ceasefire.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -0.8%; Prior -10.4%