Stock Market Update

Equity futures point to a sharply higher opening this morning after President Trump announced on Sunday that a peace deal between the U.S. and Iran has been reached. President Trump added that the Strait of Hormuz will be reopened while the U.S. naval blockade of Iran will be lifted. The U.S. and Iran are set to sign the agreement this Friday in Switzerland.

Crude oil is currently down $4.55 (-5.4%) to $80.33 per barrel. Oil prices fell during the back half of last week amid optimism of a potential peace agreement, which helped the major averages overcome earlier choppiness and finish with modest gains.

Semiconductor stocks had another great showing last week, though there was considerable volatility across the market's largest tech and magnificent seven names. Mega-cap tech stocks are poised for a strong start, including the market's newest mega-cap name, SpaceX (SPCX 170.00, +9.05, +5.6%), which enters its second day of trading today.

Corporate news flow is on the lighter side, with geopolitical developments driving the early enthusiasm and earnings winding down. This week will also be relatively light on the economic data front, with the May Industrial Production (Briefing.com consensus 0.2%) and Capacity Utilization (Briefing.com consensus 76.2%) the most notable releases on today's calendar.

In corporate news:

• Fox (FOX 57.24, -8.81, -13.4%) will acquire Roku for $160.00 per share in a combination of cash and FOX Class A common stock, valuing Roku at approximately $22 billion in enterprise value (ROKU halted)
• The Justice Department has approved the Paramount Skydance (PSKY 10.85, +0.38, +3.6%) and Warner Bros Discovery (WBD 27.16, +0.18, +0.7%) merger, according to Deadline.
• SpaceX (SPCX 170.00, +9.05, +5.6%) CEO Elon Musk said the company could generate $1 trillion in revenue by 2030, according to Reuters.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a solid start to the week with Japan's Nikkei (+5.0%) reaching a fresh record while South Korea's Kospi (+5.2%) finished just shy of a new record of its own. Japan's Nikkei: +5.0%, Hong Kong's Hang Seng: +0.5%, China's Shanghai Composite: +1.6%, India's Sensex: +1.0%, South Korea's Kospi: +5.2%, Australia's ASX All Ordinaries: +1.4%.

In news:

• China Securities Journal reported that the Chinese government will accelerate IPOs for technology companies.
• Japanese debt advanced, sending Japan's 10-yr yield back to its 50-day moving average (2.545%) even though the market expects the Bank of Japan to announce a 25-basis point rate hike overnight.
• The Reserve Bank of Australia will also meet, but a rate change is not expected.
• NZIER lowered its forecast for New Zealand's 2026 growth to 0.6% from 0.8% while the outlook for 2027 was lowered to 1.6% from 3.0%.

In economic data:

• Japan's April Tertiary Industry Activity -10.6 (last 16.0)
• South Korea's May trade surplus $27.04 bln (expected surplus of $26.95 bln; last surplus of $23.76 bln). May Imports 20.7% yr/yr (expected 20.8%; last 16.7%) and Exports 53.4% (expected 53.2%; last 48.0%)
• India's May WPI Inflation 9.68% yr/yr (expected 9.10%; last 8.26%). May trade deficit $28.21 bln (last deficit of $28.38 bln)
• New Zealand's May Electronic Card Sales Retail Sales 1.7% m/m (last -1.2%); 3.3% yr/yr (last 2.0%)
• Singapore's Q1 Unemployment Rate 2.0% (expected 2.1%; last 2.0%)

Major European indices are off to a higher start to the week amid optimism surrounding the signing of a U.S.-Iran peace deal in Switzerland, which is being planned for Friday. STOXX Europe 600: +0.7%, Germany's DAX: +1.4%, U.K.'s FTSE 100: +0.1%, France's CAC 40: +1.2%, Italy's FTSE MIB: +1.0%, Spain's IBEX 35: +1.6%.

In news:

• The market has curtailed its rate hike expectations for the U.K., now pricing in just one rate hike before the end of the year.
• The U.K. will hold another by-election on Thursday, which could trigger a leadership challenge to Prime Minister Starmer.
• President Trump said that France has to rescind its tech sales tax or face a 100% tariff on wine imports to the U.S.

In economic data:

• Eurozone's April Industrial Production 0.1% m/m (expected 0.2%; last 0.4%); 0.3% yr/yr (last -2.8%)
• Germany's May WPI -0.6% m/m (expected 0.8%; last 2.0%); 5.9% yr/yr (last 6.3%)
• Italy's April trade surplus EUR4.293 bln (expected surplus of EUR5.190 bln; last surplus of EUR4.709 bln)
• Swiss May PPI -0.4% m/m (expected 0.4%; last 0.8%); -1.8% yr/yr (last -2.0%). May SECO Consumer Climate -38, as expected (last -40)