Nasdaq tipped to rise after long weekend of Iran talks progress, hawkish Fed still looms

• Oil prices retreated to $75.75 (WTI crude) after initially jumping on Iran-Strait of Hormuz concerns, still well above sub-$60 levels seen at the start of the year
• BofA Global Research forecasts a further 75 basis points of US rate hikes in 2026 under new Fed chief Kevin Warsh, pushing real Treasury yields to their highest level in over a year
• Key events ahead include Micron earnings on Wednesday, Fed annual bank stress tests, and the latest core PCE inflation reading, with markets cautious after the S&P 500's 16% surge in April-May

Market Summary: Nasdaq Expected to Rise Amid Iran Progress and Hawkish Fed

Market Movement:

US futures opened higher following the Juneteenth holiday weekend, with Nasdaq futures leading gains at +0.4%, S&P 500 futures up 0.1%, and Dow Jones futures rising 96 points (+0.2%). Technology stocks are expected to drive the advance.

International Markets:

Asian markets posted mixed results, with Japan's Nikkei surging 1.6% to a record close and China's Shanghai Composite gaining 1.8%. South Korea's Kospi rose 0.7%, boosted by SK Hynix reaching an all-time high and becoming the country's most valuable listed company, surpassing Samsung.

Middle East Developments:

Iran reported "major progress" in US negotiations, temporarily easing tensions. Oil prices initially spiked on reports of Strait of Hormuz closure threats but retreated on diplomatic optimism. WTI crude currently trades at $75.75, down 1.15%, significantly above the sub-$60 levels from early 2026.

Federal Reserve Outlook:

Markets are pricing in an 89% probability of at least one additional rate increase before year-end 2026, with no rate cuts expected. BofA Global Research forecasts 75 basis points of additional hikes this year. The hawkish stance under new Fed Chief Kevin Warsh has pushed real Treasury yields to their highest in over a year and supported dollar strength.

Market Context:

Deutsche Bank notes the S&P 500's 16% rally in April-May limits further upside potential. Tanker traffic through the Strait of Hormuz remains severely constrained despite diplomatic progress.

Week Ahead:

Key events include FedEx and Carnival earnings, Micron's closely-watched results Wednesday, Fed bank stress tests, and core PCE inflation data.