The major U.S. index futures are currently pointing to a slightly higher open on Friday, with stocks likely to see further upside following the advance seen over the course of the previous session.
Persistent optimism about a potential U.S.-Iran deal may lead to continued strength on Wall Street amid a steep drop by the price of crude oil.
U.S. crude oil futures are slumping by 1.4 percent following recent reports the U.S. and Iran have agreed to a framework for a 60-day extension of the ceasefire.
The agreement would purportedly facilitate the reopening of the Strait of Hormuz and enable fresh negotiations over Iran's nuclear program, although President Donald Trump has yet to sign off on the deal.
Positive sentiment may also be generated in reaction a sharp increase by shares of Dell Technologies (DELL), with the computer maker skyrocketing by more than 30 percent in pre-market trading.
The spike by Dell comes after the company reported better than expected fiscal first quarter results and raised its full-year guidance.
Buying interest may be somewhat subdued, however, as traders await confirmation of the reported U.S.-Iran peace deal.
"Overall, markets are heading into the weekend in a good position as risk appetite has improved as geopolitical fears ease and inflation data avoids a major upside surprise," said Daniela Hathorn, Senior Market Analyst at Capital.com.
"However, positioning remains optimistic, valuations are elevated and much of the recent rally still relies on assumptions that tensions continue to de-escalate and earnings remain resilient," she added. "That means investors are likely to remain highly sensitive to both geopolitical headlines and incoming inflation data in the weeks ahead."
Stocks moved to the downside in early trading on Thursday but showed a significant turnaround over the course of the session. The major averages climbed well off their lows of the session and into positive territory, with the tech-heavy Nasdaq leading the rebound.
The major averages once again finished the day at new record closing highs. The Nasdaq advanced 242.74 points or 0.9 percent to 26,917.47, the S&P 500 climbed 43.27 points or 0.6 percent to 7,563.63 and the Dow inched up 24.69 points or 0.1 percent to 50,668.97.
The turnaround on Wall Street came after a report from Axios said U.S. and Iranian negotiators have reached an agreement on a 60-day memorandum of understanding.
Citing two U.S. officials and a regional source involved in the mediation efforts, Axios indicated the MOU would extend the ceasefire and launch negotiations on Iran's nuclear program.
Axios noted President Donald Trump has not yet given final approval, with a U.S. official saying he wants a couple of days to think about the deal.
Crude oil prices pulled back well off their early highs following the report, with U.S. crude oil futures closing modestly higher after surging as much as 4.3 percent.
The price of crude oil spiked overnight after reports the U.S. launched another round of "self-defense strikes" in southern Iran, leading Tehran to retaliate by purportedly targeting a U.S. air base.
"Investors are still broadly positioned for a de-escalation scenario in the Middle East, but recent headlines are a reminder that the path toward any agreement remains fragile," said Daniela Hathorn, Senior Market Analyst at Capital.com.
In U.S. economic news, the Commerce Department released a report showing consumer prices in the U.S. increased by slightly less than expected in the month of April.
The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.4 percent in April after climbing by 0.7 percent in March. Economists had expected prices to increase by 0.5 percent.
The report also said the annual rate of growth by the PCE price index accelerated to 3.8 percent in April from 3.5 percent in March, in line with estimates.
Excluding food and energy prices, the core PCE price index crept up by 0.2 percent in April after rising by 0.3 percent in March. Core prices were expected to rise by another 0.3 percent.
The annual rate of growth by the core PCE price index ticked up to 3.3 percent in April from 3.2 percent, matching expectations.
Software and computer hardware and software stocks moved sharply higher on the day, contributing to the advance by the tech-heavy Nasdaq.
Reflecting the strength in the sectors, the Dow Jones U.S. Software Index spiked by 3.4 percent and the NYSE Arca Computer Hardware Index surged by 2.9 percent.
Significant strength was also visible among biotechnology stocks, as reflected by the 2.6 percent jump by the NYSE Arca Biotechnology Index.
Gold, pharmaceutical and healthcare stocks also saw notable strength, while oil service and utilities stocks moved to the downside.
Commodity, Currency Markets
Crude oil futures are slumping $1.19 to $87.71 a barrel after rising $0.22 to $88.90 a barrel on Thursday. Meanwhile, after jumping $50.90 to $4,532.40 an ounce in the previous session, gold futures are climbing $20.20 to $4,552.60 an ounce.
On the currency front, the U.S. dollar is trading at 159.28 yen versus the 159.23 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1645 compared to yesterday's $1.1651.
Asia
Asian stocks rose broadly on Friday, with optimism around the resonant AI trade, strong earnings from Dell Technologies, and reports of a proposed 60-day ceasefire extension between the U.S. and Iran as well as possible easing of shipping restrictions through the Strait of Hormuz helping underpin regional sentiment.
The dollar treaded cautiously in Asian trading and gold held firm above $4,500 an ounce, while Brent crude futures slipped below $92 a barrel on improved prospects for unrestricted Strait of Hormuz shipping.
China's Shanghai Composite Index fell 0.7 percent to 4,068.57 following recent regulatory action on unauthorized cross-border trading.
Hong Kong's Hang Seng Index climbed 0.7 percent to 25,182.39 on optimism over a de-escalation of the conflict between the U.S. and Iran. Lenovo Group shares soared 22 percent on enthusiasm around the company's AI-driven growth outlook.
Japanese markets rose sharply to reach a record high on investor optimism that the three-month Middle East conflict may be nearing a resolution.
Traders also cheered data that showed Tokyo's core inflation rate rose more slowly than economists expected in May.
The Nikkei 225 Index surged 2.5 percent to 66,329.50, ending above 66,000 for the first time ever led by artificial intelligence and semiconductor-related shares. The broader Topix Index settled 1.4 percent higher at 3,957.17.
Seoul stocks closed at a new record high, driven by strong gains in stocks related to artificial intelligence on expectations surrounding CEO Nvidia Jensen Hwang's visit to Korea. The Kospi Index soared 3.6 percent to 8,476.15.
Australian markets logged their best single-day gain in seven weeks on U.S.-Iran peace deal hopes.
The benchmark S&P/ASX 200 jumped 1.6 percent to 8,731.70, with mining, travel and gold stocks leading the surge on hopes of restored Strait of Hormuz shipments. The broader All Ordinaries Index closed up 1.7 percent at 8,965.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index edged up by 0.3 percent to 13,244.55, marking its highest level since May 7.
Europe
European stocks have advanced on Friday, the dollar headed for a small weekly loss on improved risk sentiment in markets, and oil prices slipped to a one-month low after reports emerged the United States and Iran have agreed in principle to extend their ceasefire by 60 days.
According to the tentative agreement, pending final approval from U.S. President Donald Trump, Iran would not be able to impose tolls on ships transiting the Strait of Hormuz, while the U.S. would gradually lift its sea blockade on Iranian ports.
While the French CAC 40 Index is up by 0.6 percent, the U.K.'s FTSE 100 Index is up by 0.2 percent and the German DAX Index is up by 0.1 percent.
Pernod Ricard shares were little changed. An Indian court has rejected a plea by the French spirits makers seeking permission to sell its products in New Delhi.
Automaker Renault has rallied after the Science Based Targets Initiative approved its new near-and-long-term emissions goals, thus updating the targets first set in 2019.
German ticketing and live entertainment company CTS Eventim has also soared after revenue grew by 23 percent in the first quarter.
U.S. Economic News
Federal Reserve Vice Chair for Supervision Michelle Bowman is scheduled to speak on monetary policy before the Reykjavik Economic Conference 2026 at 9:10 am ET.
At 9:15 am ET, Philadelphia Federal Reserve President Anna Paulson is due to speak on the economic outlook before the Chamber of Commerce Southern New Jersey.
MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of May at 9:45 am ET.
The Chicago business barometer is expected to rise to 51.2 in May from 49.2 in April, with a reading above 50 indicating growth.
At 12:40 pm ET, San Francisco Federal Reserve President Mary Daly is due to participate in a panel before the 2026 Reagan National Economic Forum.
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May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.