Morning Wrap: ASX 200 to rise, S&P 500 and Nasdaq hit fresh records, Oil slips on Iran deal hopes

In a nutshell:

• S&P 500, Dow, Nasdaq and Russell 2000 closed at fresh records as tech reclaimed leadership

• Snowflake's blowout guidance and a $6bn AWS deal reignited the AI trade (shares up about 36%), while Dell smashed estimates after the bell with revenue up 88%

• US and Iran reportedly agreed to a 60-day ceasefire-extension framework pending Trump's approval, pulling oil off session highs

Let's dive in.

• Major US benchmarks higher and finished near best levels

• Tech led the tape after Snowflake's strong outlook revived AI-trade enthusiasm, lifting cloud and software names broadly through the session

• Sector performance was a little soft, with six trading lower and the Equal-weight S&P 500 (+0.37%) underperforming the cap-weighted index by 21 bps, but still eked out a record high

• Volatile overnight session for commodities – gold finished 0.89% higher from a session low of (-2.0%), copper up 1.37% despite falling as much as 1.5%, while Brent settled 0.5% lower after rallying 3.3% in early trade

• US 10-year yield also flipped from a 5 bp rise to a 3 bp decline, closing the session at 4.45%, the lowest since 12-May and down 23 bps in the last six sessions

• Markets are trading with plenty of optimism around an Iran resolution, with earlier reports pointing to a 60-day ceasefire deal that Trump has yet to sign off, even as Iranian state media says negotiators have not agreed to any MoU or nuclear-related commitments

• Semiconductor stocks experiencing biggest gains since dotcom boom with SOX up 75% so far in 2026 (WSJ)

• Citadel's Rubner says pain trade in stocks remains higher as investors feel underexposed (BBG)

• Under the proposed US-Iran framework, the US would lift its blockade on Iranian ports and let Iran freely sell oil, with the Strait of Hormuz reopened toll-free during a 60-day window (AX) 

• US forces struck an Iranian military site near Bandar Abbas and Iran's Revolutionary Guard said it targeted a US airbase, before de-escalation headlines hit (RT) 

• Two supertankers and one LNG tanker exit the Strait of Hormuz for India and China with transponders off (RT)

• Snowflake Q1 FY27 product revenue up 34% to $1.33bn, total revenue up 33% to $1.39bn, EPS $0.39 beat ests by about 22%, raised FY27 product revenue guidance to $5.84bn, signed $6bn AWS deal, shares up ~36% (CNBC)

• Dell Q1 FY27 record revenue up 88% to $43.8bn, well ahead of ~$35bn ests, non-GAAP EPS $4.86 up 214%, booked $24.4bn AI orders, raised FY27 revenue outlook to ~$167bn, shares up ~30% after hours (DELL)

• Costco Q3 FY26 net sales up 11.6% to $69.15bn, beating estimates, EPS $4.93 vs. $4.92 ests, comparable sales up 9.8% (6.6% excluding fuel and currency), shares roughly flat after hours (CNBC)

• Salesforce guided current-quarter revenue to about $11.3bn, just short of the roughly $11.4bn ests, fuelling fears AI could disrupt its software business, shares flattish (BBG)

• Anthropic rolls out Opus 4.8 model, touts improvements to coding, financial analysis, reasoning (BBG)

• Fed Vice Chair Jefferson expects inflation to decline as tariff effects wear off, energy prices retreat (BBG)

• Fed Governor Cook says she is prepared to support raising interest rates if higher inflation persists (BBG)

• Chicago Fed's Goolsbee warns AI productivity expectations could increase inflation and necessitate interest rate hikes (RT)

• Bank of Korea held its base rate at 2.50% for a seventh straight meeting, Governor Shin Hyun-song's first decision, citing Iran-war supply-shock crosscurrents on inflation and growth (BBG)

• US Q1 2026 GDP second estimate revised down to 1.6% annualised from the 2.0% advance reading, reflecting softer investment and consumer spending (WSJ)

• US April PCE inflation up 3.8%, core up 3.3% year-on-year (up 0.2% month-on-month), both in line, personal income down 0.1% and real spending up 0.1% (BBG)

• Demand for China AI-related exports shields economy from effects of stronger yuan (BBG)

• Bravura CFO Neil Montford to step down, effective 14-Aug, company to commence international search for next CFO (BVS)

• Mayfield Group confirms sale of 10m shares by largest shareholder, Nightingale Partners (MYG)

• Pexa Group appoints former Deputy REA CFO Graham Curtin as CFO, effective 1-Sep (PXA)

• Commodity volatility: Thursday was a rough session for local miners, with the XMJ down 2.4%. Gold was down ~1.8% when our market closed, so local equities bore the brunt of the selling. Overnight, most commodities clawed back losses to close in positive territory, with gold settling 0.9% higher. NYSE-listed Newmont shares finished up 0.9% to US$108.23 ASX-listed Newmont shares tumbled 7.2% on Thursday, with an implied open of (+3.6%). The setup is similar for names like BHP, where its NYSE-listed shares traded flat vs. ASX-listed shares down 1.1% yesterday. So a bit of optimism for local equities to price in, but still a very volatile backdrop for commodities.

• Software: iShares Expanded Tech Software ETF up 2.8% overnight to the highest since 29-Jan and trading above the 200-day moving average for the first time since 30-Dec-25. Snowflake's (+36.4%) earnings triggered relatively broad gains across the US software complex. Local software stocks have struggled to trade with such optimism, and most (e.g. WTC, XRO, PME etc.) remain relatively rangebound.

• Dicker Data upgraded to Overweight from Equal-weight; target up to $11 from $10.30 (Morgan Stanley)

• IDP Education downgraded to Underperform from Neutral; target cut to $2.35 from $5.45 (Macquarie)

• HealthCo Healthcare & Wellness REIT upgraded to Outperform from Neutral; target up to $0.83 from $0.67 (Macquarie)

• Virgin Australia initiated Neutral with $2.85 target (JPMorgan)

Stocks trading ex-dividend: 

• Fri 29 May: Metrics Income Opportunities Trust (MOT) – $0.012, Metrics Master Income Trust (MXT) – $0.015, Pengana International Equities (PIA) – $0.014

• Mon 1 Jun: L1 Long Short Fund (LSF) – $0.037

• Tue 2 Jun: None

• Wed 3 Jun: None

Other ASX corporate actions today:       

• Dividends paid: Acrow (ACF), Autosports Group (ASG), Charter Hall Retail REIT (CQR), OM Holdings (OMH), US Masters Residential Property Fund (URF)

• Earnings: Findi (FND), Straker (STG)

• IPOs: None

• AGMs: Droneshield (DRO)

Economic calendar (AEST):

• 10:00 pm: Germany Inflation

• 10:30 pm: Canada Q1 GDP