The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to see further upside after recovering from an initial pullback to end the previous session modestly higher.
Stocks may continue to benefit from optimism about an end to the U.S.-Iran war even as crude oil prices remain elevated going into the busy Memorial Day weekend.
In remarks to reporters on Thursday, Secretary of State Marco Rubio claimed the U.S. and Iran have made "some progress" in negotiations to end the war.
Rubio also said there have been "some good signs" but cautioned he doesn't want to be "overly optimistic" and noted President Donald Trump has been clear he has "other options" if the U.S. and Iran can't get a "good deal."
One of the sticking points seems to be Iran's efforts to establish a tolling system for the Strait of Hormuz, which Rubio called "unacceptable" and said "would make a diplomatic deal unfeasible."
Rubio's comments come as reports from Iranian state media suggest the latest U.S. peace proposal has narrowed some of the gaps between the two countries.
Following the rally seen during Wednesday's session, stocks moved back to the downside in early trading on Thursday before regaining ground over the course of the day.
The major averages saw considerable volatility in the latter part of the session but finished in positive territory, with the Dow reaching a new record closing high.
The Dow advanced 276.31 points or 0.6 percent to 50,285.66, the S&P 500 rose 12.75 points or 0.2 percent to 7,445.72 and the Nasdaq inched up 22.74 points or 0.1 percent to 26,293.10.
The initial pullback on Wall Street came amid a substantial rebound by the price of crude oil, with U.S. crude oil futures surging as much as 4.5 percent after plummeting by 5.7 percent on Wednesday.
Crude oil futures jumped back above $100 a barrel as traders awaited developments on a potential U.S.-Iran peace deal.
Oil prices saw further upside after a report from Reuters said Iran's Supreme Leader has issued a directive that the country's near-weapons-grade uranium should not be sent abroad.
However, crude oil futures saw a substantial downturn after an X post from Al Jazeera reporter Ali Hashem said a senior Iranian official denied the reports, contributing to the recovery by stocks.
The official told Hashem "no new order has been issued" and called the reports "propaganda by the enemies of the deal."
Meanwhile, traders seemed to shrug off the negative reaction to earnings news from Nvidia (NVDA), although the AI leader still slumped by 1.8 percent.
The decrease by shares of Nvidia came even though the chipmaker reported better than expected first quarter results, as investors worry about the sustainability of its rapid growth.
"The chip giant is starting to sound like a broken record, playing the same message over and over again," said Dan Coatsworth, head of markets at AJ Bell. It effectively says AI demand is strong, lots of customers are queuing up for its chips, and there is still much more to go for."
"The market's attention is now focused on how long Nvidia can sustain this momentum," he added. "Even the fastest or strongest athletes run out of steam at some point, and investors are starting to worry that Nvidia cannot keep up its current pace."
Disappointing earnings news from Walmart (WMT) also generated some negative sentiment early in the session, with the retail giant plunging by 7.3 percent.
Computer hardware stocks moved sharply higher over the course of the session, driving the NYSE Arca Computer Hardware Index up by 4.9 percent.
The rally by the sector came after a report from the Wall Street Journal said Trump administration is awarding $2 billion in grants to nine quantum-computing companies.
Substantial strength also emerged among airline stocks, as reflected by the 4.5 percent spike by the NYSE Arca Airline Index.
Networking, pharmaceutical and semiconductor stocks also showed strong moves to the upside, while energy stocks came under pressure amid the downturn by the price of crude oil.
Commodity, Currency Markets
Crude oil futures are climbing $0.40 to $96.75 a barrel after tumbling $1.91 to $96.35 a barrel on Thursday. Meanwhile, after rising $7.20 to $4,542.50 an ounce in the previous session, gold futures are falling $18.50 to $4,524 an ounce.
On the currency front, the U.S. dollar is trading at 159.10 yen versus the 158.96 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1599 compared to yesterday's $1.1618.
Asia
Asian stocks ended higher on Friday, extending gains from the previous session on rising hopes for a diplomatic resolution to the Middle East conflict.
With Iran reviewing the latest proposal from the U.S. and Pakistan acting as the mediator, investors are hopeful that the tree-month war may end soon.
The dollar was firm around a six-week high and spot gold dipped toward $4.500 an ounce amid fears that elevated oil prices will fuel inflation and force central banks to keep interest rates higher for longer.
Brent crude prices jumped nearly 3 percent toward $106 a barrel after reports emerged that Iran is discussing with Oman ways to establish a toll system for ships transiting the Strait of Hormuz.
China's Shanghai Composite Index gained 0.8 percent to close at 4,112.90, after having logged its biggest drop since March on Thursday.
Hong Kong's Hang Seng Index closed up 0.9 percent at 25,606.03, led by tech shares. Lenovo soared 19.8 percent after delivering exceptional fourth-quarter results.
Japanese markets closed on a buoyant note after the so called "core inflation" rate softened to over four-year low in April, potentially weakening the case for an early rate hike by the Bank of Japan.
Core inflation cooled to 1.4 percent in the month, easing from 1.8 percent in March and marking the lowest reading since March 2022.
The Nikkei 225 Index jumped 2.7 percent to 63,339.07, marking a record close. The broader Topix Index settled 1 percent higher at 3,892.46. AI and chip-linked stocks led the charge, with SoftBank Group shares surging 11.9 percent.
Seoul stocks rose modestly after a measure of consumer sentiment rose in May. The Kospi Index ended 0.4 percent higher at 7,847.71. extending gains for a second straight session.
Samsung Electronics fell 2.3 percent after rising sharply in the previous session on a last-minute deal to avert a massive labor union strike.
Australian markets advanced after weak jobs data prompted traders to scale back their rate hike expectations. The benchmark S&P/ASX 200 Index rose 0.4 percent to 8,657, extending gains for a second consecutive session on gains by materials stocks. The broader All Ordinaries Index climbed 0.4 percent to 8,877.20.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index advanced 0.9 percent to 12,991.31, reaching its highest level since May 14 after the release of upbeat retail sales data.
Europe
European stocks have risen to two-week highs on Friday amid renewed optimism about signs of progress in U.S.-Iran peace talks.
Despite some good signs in the talks, both sides are still at odds over Tehran's uranium stockpile and future control of the Strait of Hormuz.
In economic news, German GDP grew 0.3 percent from a quarter ago in the first quarter, unrevised from the previous estimate and following fourth quarter's 0.2 percent expansion, according to detailed data released by Destatis.
Germany's consumer confidence index unexpectedly rose to -29.8 points in June from -33.1 points in May, while analysts had expected the score to fall to -33.7.
Elsewhere, U.K. retail sales fell at the fastest pace in nearly a year in April, missing expectations.
While the German DAX Index is up by 1.1 percent, the French CAC 40 Index is up by 0.7 percent and the U.K.'s FTSE 100 Index is up by 0.4 percent.
Technology stocks traded higher, with STMicroelectronics, Infineon and ASM International posting strong gains.
German sportswear manufacturer Adidas and Puma have also surged after Deckers Outdoor forecast annual sales and profit above Wall Street estimates.
British IT reseller Softcat has also shown a substantial move to the upside after raising its full-year profit guidance.
Miniature wargames maker Games Workshop has also rallied after it forecast annual profits before tax above expectations.
Meanwhile, Spanish beauty and fashion group Puig Brands has plunged following the collapse of a proposed combination with Estee Lauder.
Private bank Julius Baer has also plummeted after saying that client money inflows slowed at the beginning of the year due to uncertainty around the Middle East conflict.
Richemont shares have also fallen. The Swiss-based owner of a host of several luxury brands has warned that uncertainty is likely to persist despite beating expectations for annual and Q4 sales.
U.S. Economic News
The University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of May at 10 am ET.
The consumer sentiment index for May is expected to be unrevised from the preliminary reading of 48.2, which was down from 49.8 in April and marked a new record low.
Also at 10 am ET, the Conference Board is due to release its report on leading economic indicators in the month of April. The leading economic index is expected to dip by 0.3 percent in April after falling by 0.6 percent in March.
Federal Reserve Governor Christopher Waller is also scheduled to deliver a lecture on the economic outlook before the Centre for Central Banking Guest Lecture event at 10 am ET.
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May 15, 2026 15:25 ET Apart from the confirmation of Kevin Warsh as the next Fed chair, the main news on the economics front this week included key price data from the U.S. and the first quarter economic growth figures from major economies. Both consumer prices and producer costs have started to reflect the effect of supply shocks due to the Middle East conflict. In Europe, GDP data was in focus, while inflation data from China dominated the news flow in Asia.