By Stephen Culp
NEW YORK, May 29 (Reuters) – U.S. stocks followed global stocks higher and crude oil prices retreated on Friday as investors approached the end of a holiday-shortened week with renewed hopes of progress toward a peaceful resolution to the Iran war.
A narrow tech-led rally propelled all three major U.S. stock indexes to modest gains, while benchmark U.S. Treasury yields fell for a fourth straight session, as markets turned the page on a week and month marked by fears that a fragile truce would collapse amid signs of progress toward a peace deal.
The S&P 500 posted its ninth consecutive weekly gain, its longest winning streak since December 2023.
The three indices registered monthly advances.
Despite the rally, indices were well below session highs at the close.
The United States and Iran have agreed to extend their ceasefire and lift restrictions on shipping as peace talks progress, sources told Reuters, but US President Donald Trump has yet to approve the deal, which Iranian state media says has not yet been finalized.
“This administration watches the markets and likes to do big things when the markets are closed to control the messaging before the market has a chance to react,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.
“If President Trump approves the MOU and we actually get 60 days of the Strait of Hormuz reopened… I think 60 days should be enough time to reach a more substantial agreement,” he added.
The conflict, now lasting three months, has put upward pressure on inflation, which threatens to become less transitory and more established the longer the war continues.
U.S. Federal Reserve officials are now considering raising interest rates to counter that rising risk.
“The market has been pricing in the odds of an increase (in the fourth quarter) for a couple of weeks,” Mayfield said. “By then we’ll have a lot of data, but I don’t expect the Fed to do much.”
The Dow Jones Industrial Average rose 363.68 points, or 0.72%, to 51,032.65, the S&P 500 rose 16.49 points, or 0.22%, to 7,580.12, and the Nasdaq Composite rose 55.15 points, or 0.21%, to 26,972.62.
European stocks closed slightly higher and made gains in the month, which was marked by hopes of a deal that would reopen the Strait of Hormuz. The closure of the waterway has strained the global economy and roiled markets.
MSCI’s gauge of global stocks rose 5.75 points, or 0.51%, to 1,130.47.