Markets bet on Iran de-escalation as AI stocks extend rally

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Markets bet on Iran de-escalation

Highlights

WTI crude fell below $90 on reports of a possible temporary agreement on Iran.
The S&P 500 remained near record highs, though gains were limited.
Memory chip stocks continued to rise on expectations of a long AI-driven cycle.
The Strait of Hormuz remains the main risk point for oil, inflation and global trade.

The oil risk premium starts to fade

The price of U.S. crude fell below $90 a barrel after Iranian media reported an unofficial draft of a temporary peace agreement. According to Bloomberg, traffic through the Strait of Hormuz could return to normal within a month after the deal is finalized.

For the energy market, this is a key signal. A large share of global oil and liquefied natural gas shipments passes through Hormuz, so the sharp drop in traffic since the start of the conflict quickly pushed energy prices higher and added pressure on businesses, transport companies and consumers. Traders are now pricing in the possibility that part of that war premium will fade.

Still, market participants do not see the deal as done. U.S. Secretary of State Marco Rubio warned that finalizing the agreement could take several days. An Iranian official, meanwhile, said the issue of the country’s highly enriched uranium stockpiles is not on the negotiating agenda.

AI once again outweighs geopolitics

The reaction in equities was more restrained. The S&P 500 edged only slightly higher, but remained close to record highs. Analysts say the market’s resilience is being driven not only by lower oil risks, but also by steady demand for companies linked to artificial intelligence.

The rally was especially visible among memory chipmakers. Investors are increasingly betting that the AI boom is changing not just one segment of the market, but the entire demand structure for semiconductors, servers and data centers. That is supporting expectations for a longer-lasting revaluation of the industry.

Corporate news also moved individual stocks. Salesforce was preparing to report results after the close, with investors watching whether the earnings release could pull the stock out of a prolonged slump.

JPMorgan upgraded FedEx to overweight, citing expectations for improvement in the company’s core business ahead of the freight unit spinoff.

Lululemon reached an agreement with founder Chip Wilson to refresh its board.

Blackstone will provide Apogee Therapeutics with up to $1.3 billion in financing, while Bath & Body Works reported first-quarter results above analysts’ forecasts and said Chief Financial Officer Eva Boratto will step down on June 12.

What markets will watch next

If traffic through Hormuz really returns to normal within a month, it would ease inflation pressure and support consumers, transport companies and industrial businesses.

But the risk of a reversal remains high. A report from Iranian state media alone is not enough to treat the agreement as finalized. Markets are therefore heading into the coming days with two opposing forces in play: hopes for de-escalation in energy markets and a still-strong appetite for AI-related trades.

As we previously reported, Nvidia chip case puts Asia export controls under scrutiny.

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