US equity futures are up big this morning and making fresh all time highs, led by tech companies,while oil prices and bond yields fell sharply on optimism that the US and Iran are nearing a peace deal.As of 8:00am Nasdaq 100 futures jumped 1.7% while those for the S&P 500 gained 1%, with both gauges set to build on record highs. Iran is evaluating a new proposal from the US to end their near 10-week war, according to an Axios report. If Tehran accepts the terms, it will lead to a gradual reopening of Hormuz and lifting of the American blockade on Iranian ports. Brent tanked 11% to below $98 a barrel. That comes as US gasoline prices topped $4.50 a gallon for the first time since July 2022. The yield on 10-year Treasuries dropped eight basis points to 4.35%. In the UK, the rate on two-year UK gilts tumbled 17 basis points. The dollar hit the lowest level since February, while gold topped $4,700 an ounce. Bitcoin rose for a seventh straight day. US economic data calendar slate includes April ADP employment change at 8:15am. Fed speaker slate includes Musalem (9:30am) and Goolsbee (1pm)

In premarket, most Mag 7 names are higher: Alphabet (GOOGL) climbs 1.6% after the Information reported that AI startup Anthropic plans to spend about $200 billion with Google over five years (Amazon +1%, Apple -0.5%, Nvidia +2.5%, Meta +0.5%, Microsoft +0.1, Tesla +0.6%)

In other corporate news, Novo Nordisk’s new Wegovy obesity pill fueled sales in the first quarter and the drugmaker said this year’s proft and sales declines won’t be as bad as previously expected. BMW expects profitability to remain broadly stable this year as the automaker offsets a downturn in China with robust sales in Europe. Samsung reached a $1 trillion market valuation after shares more than quadrupled over the past year on booming demand for AI chips. And the FT reported that China’s main chip-sector investment fund is in discussions to lead a fundraising round for DeepSeek at a valuation of about $45 billion.

Risk assets soared and oil tumbled, as geopolitical and micro tailwinds fueled risk-on sentiment broadly across the market. On Geopolitics, Brent tanked 11% to below $98 a barrel following an Axios report that US & Iran are working on a memorandum that would set a framework for more nuclear talks (and said US expects Iranian responses on key points in the next 48 hours). Here are the details from the Axios report:

Separately, last night Trump paused “Project Freedom” in the Strait citing “great progress” towards an agreement.

“The market continues to price in de-escalation and an easing in supply constraints,” said Geoff Yu, senior macro strategist at BNY. “The road ahead is bumpy, but the direction of travel seems clear.”

AI euphoria is also helping the rally. Alphabet is up in premarket trading after the Information reported Anthropic plans to spend about $200 billion with Google over five years. AMD was priced for perfection ahead of results, but managed to deliver, with shares soaring after the chipmaker gave robust predictions for longer-term growth. That’s adding to nerves about how Nvidia will retain its grip on the AI processor market in the face of intense competition.

Meanwhile, looking under the hood, while both US stock benchmarks are set to extend Tuesday’s record highs, the S&P 500 Equal-Weight Index hasn’t posted a new high since February. This thin leadership is raising “yellow flags” for Goldman Sachs strategist Ben Snider, while Barclays’ Emmanuel Cau also noted earlier that stocks seem “increasingly disconnected from signals coming from the rates and oil markets.”

In politics, voters in Ohio handily backed Trump ally Vivek Ramaswamy’s bid to be the Republican nominee for governor, while Democrat Sherrod Brown will get another shot at returning to the Senate after being defeated in 2024. Ken Griffin said he plans to make Citadel’s Miami tower even bigger after New York Mayor Zohran Mamdani name-checked the billionaire in his pledge to charge more taxes on second homes.

In private credit, Oaktree Capital cut the value of one of its funds by almost 4% as the firm marked down its software assets. A New Mountain Capital private credit fund that sold almost half-a-billion-dollars of assets at a discount earlier this year and used some of the cash to scoop up beaten-down loans says the strategy is already paying off.

Source: ZeroHedge News