Morning in New York: Hopes for peace fuel a rally

A daily review and forecast of events in the U.S. stock market by Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The upcoming session will take place against the backdrop of continued positive developments in the news regarding U.S. foreign policy. The U.S. and Iran have announced that they have reached a framework agreement to end military operations and reopen the Strait of Hormuz as early as June 19. As a reminder, a memorandum between Washington and Tehran is scheduled to be signed in Switzerland on the same date. U.S. President Donald Trump has ordered the lifting of the naval blockade of Iranian ports. The reduced risk of disruptions in energy supplies is contributing to the continued correction in oil prices, easing inflation expectations, and sustaining investor interest in higher-yielding assets.

At the same time, the peace agreement remains provisional, and its conclusion depends on a number of factors, including the cessation of hostilities in Lebanon. Meanwhile, as previously reported, negotiations on Tehran’s nuclear program will continue for another 60 days. The timing of the lifting of the naval blockade and the procedure for collecting transit fees also remain open. Tehran is prepared to allow free passage only during the negotiation period and to charge a fee thereafter. Washington insists on free transit without additional conditions. The actual resumption of shipping through the Strait of Hormuz may be delayed due to mine clearance, the pace of which is met with skepticism by European allies. The main source of tension is Israel’s position, which is increasingly diverging from Trump’s line. Prime Minister Benjamin Netanyahu stated that Israel will maintain a military presence in southern Lebanon and act independently against Hezbollah. Israel’s Defense Ministry reported that troops will remain in buffer zones in Lebanon, Syria, and Gaza for an indefinite period and promised a decisive response in the event of an Iranian attack. A senior Israeli official described the preliminary deal as extremely disadvantageous for his country. This leaves room for conflicting reports and bouts of volatility.

Today’s economic calendar is dominated by minor releases. The ADP employment report for the week ending May 30 (previous reading: 29,000), the New York Fed’s Services Survey for June (May: -5.8 points), as well as housing starts data for May (consensus: -2%, April: -2.8%) and building permits (consensus: -0.9%, April: +4.4%).

S&P 500 futures are trading flat following strong gains yesterday. We assess the risk balance for the upcoming session as neutral with moderate volatility. Falling oil prices and the de-escalation of the conflict in the Middle East are supporting risk appetite; however, the positive scenario is already partially priced in, and uncertainty regarding the details of the agreement and anticipation of the Fed’s decision limit the potential for further gains.

— Dave & Buster’s (PLAY) stock is down nearly 15% after its revenue and adjusted earnings for the quarter fell short of consensus estimates, and comparable sales declined more sharply than average forecasts had predicted. This is fueling doubts about the timeline for a recovery in customer traffic and the effectiveness of the company’s turnaround strategy.

— Shares of Apollo Commercial Real Estate Finance (ARI) are up 2% following the decision to liquidate assets and return capital to shareholders, specifically in the form of a $3.75-per-share dividend. The company made this decision following the sale of its commercial mortgage loan portfolio. The market reacted positively to the transparent plan for monetizing the balance sheet, although the timing and final amount of payments remain subject to shareholder approval and the sale of remaining assets.

— Shares of Adaptive Biotechnologies (ADPT) fell 7% following the announcement of plans to spin off its residual symptom diagnostics and immunology divisions. The potential value creation from this spin-off was offset by the issuance of $250 million in convertible bonds. This decision raised concerns about capital dilution and increased financial burden.

— Macerich (MAC) shares are down about 3% following the announcement of a secondary offering of 14 million shares via a forward sale agreement, with an option to increase the offering by an additional 2.1 million shares. The proceeds are planned to be used for transactions and general corporate purposes. Investors are reacting negatively to the prospect of dilution.

Trading on U.S. stock markets on June 15 closed firmly in positive territory. The S&P 500 rose 1.65%, the NASDAQ 100 soared 3.06%, and the Dow Jones and Russell 2000, which gained 0.92% and 0.72% respectively, hit new all-time highs.

The main driver behind the sharp rally was a significant easing of foreign policy tensions following the conclusion of a framework agreement between the United States and Iran.

Five companies from the "Magnificent Seven" rose by more than 2% on the back of increased risk appetite. The IT sector (XLK: +3.78%) emerged as the clear growth leader, supported by large-scale buying of chipmakers’ and software companies’ stocks. As expected, the energy sector (XLE: -3.48%) lagged behind, reacting to the collapse in oil prices.

The macroeconomic data released yesterday came in weaker than expected, but market participants ignored it, focusing instead on the easing of global risks. The Empire State Manufacturing Index for June fell short of expectations due to a sharp drop in new orders. May industrial production data also came in worse than forecast. The National Association of Home Builders (NAHB) confidence index unexpectedly declined. Nevertheless, expectations that the Strait of Hormuz would be reopened led to a nearly 5% drop in WTI oil prices, to their lowest level since early March, which significantly eased investors’ fears of a new surge in inflation. Against this backdrop, yields on short-term Treasuries fell by 2 basis points.

— The completion of an IPO of unprecedented scale and Elon Musk’s announcement of plans to grow SpaceX’s revenue (SPCX: +19.6% at the close of trading on June 15) to $1 trillion by 2030 led to a continued rally in its shares. After the underwriters exercised their option to purchase an additional 83.3 million shares, the total offering size reached 638.9 million, and the gross proceeds raised increased to approximately $85.7 billion. The scale of the deal confirms strong investor demand for shares in the space infrastructure and satellite communications sector, as well as interest in SpaceX’s long-term growth story.

— Fox’s market capitalization (FOXA: -16.8%) came under pressure as market participants reacted negatively to news of the acquisition of the Roku (ROCU) for $22 billion ($160 per share), given the significant premium to the June 12 closing price and the lengthy timeline for closing the deal (the second half of 2027).

— Mike Lyons has unexpectedly stepped down as CEO of Fiserv (FISV: -10.9%) to take the helm at Truist Financial (TFC); he has been replaced by Takis Georgakopoulos. These personnel changes have created uncertainty regarding the fintech giant’s strategic direction.

— TripAdvisor (TRIP: +1.2%) is selling its online restaurant booking service, TheFork, to American Express for $700 million in cash. The proceeds from the sale will be invested in the fast-growing Experiences segment and in expanding shareholder return programs.

— Salesforce (CRM: -0.81%) has agreed to acquire the customer service platform Fin for approximately $3.6 billion, further strengthening its focus on agent AI. The acquisition is expected to expand the capabilities of Agentforce. According to the company, Fin’s AI agent resolves approximately 76% of customer inquiries across various channels. The deal is expected to close in the fourth quarter of fiscal year 2027. The muted market reaction reflects the moderate scale of the acquisition and investors’ questions regarding the return on Salesforce’s AI M&A strategy.

This article was AI-translated and verified by a human editor