Wall Street Extends Rally as Truce Hopes Lift Sentiment

US stocks closed higher on Thursday as optimism around the ceasefire between the United States and Iran continued to support risk appetite, while oil prices stabilized after recent volatility.

The Nasdaq Composite rose 0.8%, while the S&P 500 gained 0.6%, extending a seven-session rally. The Dow Jones Industrial Average also advanced 0.6%, returning to positive territory for the year.

Markets remained driven by geopolitical developments following the announcement by Donald Trump of a two-week truce with Iran, which had triggered a sharp shift in sentiment earlier in the week. That announcement sent equities sharply higher and pushed oil into its steepest one-day drop since 2020, with West Texas Intermediate crude falling 15%.

On Thursday, oil prices attempted to recover. WTI climbed to $102.70 per barrel before easing to around $98.90 by late trading, still up 4.8% on the day. Brent crude rose more than 1% to approach $96, following a 13% decline in the previous session. The rebound reflected ongoing uncertainty around supply risks despite easing tensions.

Investor sentiment was further supported by comments from Benjamin Netanyahu, who signaledreadiness to open negotiations with Lebanon, raising hopes of broader regional de-escalation.

On the macro front, inflation data provided a steady backdrop. The Personal Consumption Expenditures (PCE) index—the Federal Reserve’s preferred inflation gauge—rose 2.8% year-on-year, unchanged from the prior reading. Core PCE slowed slightly to 3% from 3.1%, while both measures increased 0.4% month-on-month, in line with expectations.

In rates and currency markets, the 10-year US Treasury yield edged down to 4.29%, while the US Dollar Index slipped 0.4% to 98.77, reflecting softer demand for safe-haven assets.

Commodities and alternative assets showed mixed performance. Gold recovered from early losses to close 0.4% higher at $4,795 per ounce, while Bitcoin hovered near $72,100 with modest gains.

Equities saw broad-based strength, particularly in technology. Amazon surged 5.5%, leading gains among major names, while Intel climbed around 5% after announcing an expanded chip agreement with Google. In consumer stocks, Constellation Brands jumped 8.5% despite weaker sales, and Disney added 0.6% amid restructuring plans that include job cuts. 

Market Outlook

Markets are likely to remain sensitive to geopolitical headlines, particularly developments around the US–Iran truce and any signs of broader stability in the Middle East. Continued de-escalation could support equities and keep downward pressure on oil prices.

Attention will also turn to upcoming Consumer Price Index data, which may offer clearer direction on inflation and the Federal Reserve’s policy path. If inflation remains stable and tensions ease, equities could extend gains, while the dollar may stay under pressure as expectations build for steady or lower interest rates.