Stocks Climb on Iran Talks Optimism, Tech Results: Markets Wrap

(Bloomberg) — US stocks rose on optimism that America and Iran are moving toward talks after days of deadlock. Blowout results from Intel Corp. drove a rally in tech shares.

Futures for the S&P 500 advanced 0.3%, while Brent trimmed gains to around $105 a barrel. The moves came after officials familiar with the matter said Iran’s foreign minister was expected in Islamabad on Friday. A second round of peace talks between the parties was anticipated, the officials said, without specifying when they would take place.

Treasuries rose across the curve on hopes that a breakthrough would ease inflation risks, with the 10-year yield down one basis points at 4.31%. The dollar slid 0.1%. Gold and Bitcoin swung from losses to gains.

“It’s a positive headline,” said Alexandre Baradez, chief market analyst at IG in Paris. “There’s been so many of those that I’m not sure what to do with it. The market has already priced much of what a deal would bring. I also tend to think that the impact the conflict will have on the economy is being underplayed.”

Nasdaq 100 contracts climbed 1.2% as Intel surged 26% in premarket trading on a blockbuster sales forecast. In Taipei, Taiwan Semiconductor Manufacturing Co. jumped 5% after regulators eased limits on single-stock fund holdings.

Resurgent optimism over the economic potential of artificial intelligence has powered semiconductor manufacturers to an unprecedented 17-day rally. Investors also see the sector as at little risk of spillover from the Iranian war, with corporate profits and outlooks outpacing expectations in most instances.

“Those who called the end of the AI trade made a big mistake, as we can see looking at the semiconductor space,” said Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers. “The earnings growth is just astounding. It’s a sweet spot where the offer for chips can’t meet the demand.”

In Europe, SAP climbed 5.5% as its results helped temper fears of disruption from artificial intelligence for software firms. Still, the Stoxx 600 fell 0.4%, with sectors such as autos and retail hit on concern that the war in the Middle East will have a long-lasting impact on consumer sentiment.

Traders will watch signals from the US and Iran, along with shipping flows, for clues on energy supply risks, with any Strait of Hormuz escalation likely to keep oil elevated.

“One takeaway from this earnings season is that the US leadership is back because of its dominance in tech, and semiconductors notably,” said David Kruk, head of trading at La Financiere de l’Echiquier in Paris. “Investors are now focusing more on earnings than geopolitics and taking the view that eventually a peace deal will occur.”

What Bloomberg Strategists Say:

“Equities are proving more resilient to rising oil, allowing tech to power gains. There is still a clear reaction function between energy prices and equities, but the beta has declined, even as oil has risen above levels seen since the ceasefire was announced.”

— Skylar Montgomery Koning, macro strategist. For the full analysis, click here.

Corporate Highlights:

Procter & Gamble Co. reported stronger-than-expected results for its latest quarter, driven by growth in the beauty category, while significantly raising its outlook for commodity costs in the company’s current fiscal year. Meta Platforms Inc. and Microsoft Corp. are planning cuts or announcing buyouts that could affect as many as 23,000 jobs, part of an effort to streamline operations and offset heavy spending on artificial intelligence. DeepSeek rolled out preview versions of a new flagship artificial intelligence model a year after upending Silicon Valley. Intel Corp. delivered a blockbuster sales forecast that shattered Wall Street expectations, signaling that the long-struggling chipmaker is benefiting from the giant build-out of artificial intelligence computing. Porsche AG has agreed to sell its stake in the venture that owns the Bugatti supercar brand to a consortium led by HOF Capital, the fund co-founded by a scion of Egypt’s billionaire Sawiris family. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.3% as of 8:41 a.m. New York time Nasdaq 100 futures rose 1.2% Futures on the Dow Jones Industrial Average were little changed The Stoxx Europe 600 fell 0.4% The MSCI World Index was little changed Currencies

The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.2% to $1.1708 The British pound rose 0.2% to $1.3490 The Japanese yen rose 0.1% to 159.54 per dollar Cryptocurrencies

Bitcoin rose 0.5% to $78,273.6 Ether was little changed at $2,327.76 Bonds

The yield on 10-year Treasuries declined one basis point to 4.31% Germany’s 10-year yield was little changed at 3.01% Britain’s 10-year yield advanced two basis points to 4.96% Commodities

West Texas Intermediate crude fell 0.1% to $95.71 a barrel Spot gold rose 0.2% to $4,705.44 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Neil Campling, Winnie Hsu and Subrat Patnaik.

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