The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to see further upside following the rally seen over the course of the previous session.
Optimism about an end to the conflict in the Middle East may lead to continued strength on Wall Street after President Donald Trump once again signaled a deal is near.
A report from Axios said the U.S.-Iran memorandum of understanding calls for the Strait of Hormuz to reopen immediately without tolls and for Iran to receive sanctions relief based on compliance.
The report cited a diplomat from one of the mediating countries and a U.S. official, with the diplomat telling Axios the U.S. and Iran "have agreed on the text of a deal" but acknowledging the deal still needed final sign-off.
The deal would also reportedly extend the ceasefire for 60 days, including in Lebanon, with nuclear negotiations set be held during that time.
A separate report from Bloomberg said the U.S. and Iran may sign the agreement on the sidelines of the Group of Seven world leaders summit next week.
"The maxim 'once bitten, twice shy,' isn't being applied by the market when it comes to Donald Trump's pronouncements, as his latest of several suggestions a deal is close has helped to drive stocks higher once more," said Dan Coatsworth, head of markets at AJ Bell.
He added, "Whether momentum can be sustained depends on positive noises about a resolution translating into something more solid in the coming days."
After showing a lack of direction earlier in the session, stocks showed a substantial move to the upside in afternoon trading on Thursday. The major averages all moved sharply higher, rebounding from yesterday's weakness.
The major averages pulled back off their highs going into the end of the day but still posted strong gains. The Nasdaq surged 640.16 points or 2.5 percent to 25,809.66, the Dow shot up 929.97 points or 1.9 percent to 50,848.75 and the S&P 500 jumped 127.31 points or 1.8 percent to 7,394.30.
The late-day rally on Wall Street came as crude oil prices plunged after President Donald Trump called off previously announced attacks against Iran.
Trump said in a post on Truth Social that the decision was "based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved."
The reversal came after said in early post that the U.S. would be hitting Iran "very hard tonight" and claimed he plans to assume total control of their oil and gas markets "at some point in the not too distant future."
Bargain hunting also contributed to the surge following the weakness seen during yesterday's session, which dragged the Nasdaq and S&P 500 down to their lowest closing levels in a month.
Meanwhile, traders seemed to shrug off a report from the Labor Department showing producer prices increased by more than expected in the month of May.
The Labor Department said its producer price index for final demand shot up by 1.1 percent in May, matching a downwardly revised jump in April.
Economists had expected producer prices to climb by 0.7 percent compared to the 1.4 percent surge originally reported for the previous month.
The report also said the annual rate of producer price growth accelerated to 6.5 percent in May from 5.7 percent in April, reaching the fastest rate of growth since November 2022.
Semiconductor stocks helped lead the markets higher, with the Philadelphia Semiconductor Index spiking by 7.9 percent.
Shares of Intel (INTC) soared by 9.2 percent after Bank of America upgraded its rating on the chipmaker's stock to Buy from Underperform.
The steep drop by the price of crude oil also contributed to substantial strength among airline stocks, resulting in a 7.5 percent surge by the NYSE Arca Airline Index.
Networking, gold and computer hardware stocks also saw significant strength, while energy and software stocks bucked the uptrend.
Commodity, Currency Markets
Crude oil futures are plunging $2.52 to $85.19 a barrel after tumbling $2.32 to $87.71 a barrel on Thursday. Meanwhile, after falling $19.30 to $4,114 an ounce in the previous session, gold futures are surging $108.50 to $4,222.50 an ounce.
On the currency front, the U.S. dollar is trading at 160.25 yen versus the 159.92 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1563 compared to yesterday's $1.1577.
Asia
Asian shares rallied on Friday after U.S. President Donald Trump called off new military strikes on Iran and said a peace deal could be signed in a few days, helping ease fears of escalation.
Iran, however, maintained a tough stance and pushed back against optimistic remarks from Trump. Iranian officials insisted that no final decision has been made and that key differences remain unresolved.
Iranian Foreign Ministry spokesperson Esmaeil Baghaei dismissed reports regarding the timing and location of any potential agreement as premature, clarifying that Tehran will not compromise on what it describes as its "red lines." It was said significant obstacles continue to stand in the way of a breakthrough.
The dollar was mildly lower in Asian trading, bond yields eased and gold was subdued below $4,200 an ounce, while Brent crude prices dropped toward $88 a barrel, hitting two-month lows.
China's Shanghai Composite Index rallied 1.1 percent to 4,031.51 as e-commerce stocks rebounded after falling in the previous session following warnings from regulators over misleading marketing tactics.
Hong Kong's Hang Seng Index jumped 1.9 percent to 24,718.10, after having hit a 11-month low in the previous session.
Japanese markets soared on Middle East peace deal hops. The Nikkei 225 Index surged over 4 percent at one stage before paring some gains to end up 2.8 percent at 66,020.04.
The broader Topix Index settled 1.4 percent higher at 3,881.96. The yen was range bound against the dollar as traders remained on alert for any intervention from authorities.
Tech shares topped the gainers list, with memory chipmaker Kioxia Holdings surging 7.6 percent to 81.200 yen, replacing Toyota Motor as Japan's largest company by market capitalization.
Seoul stocks surged as investors snapped up tech heavyweights on U.S.-Iran truce hopes. The Kospi Index spiked 4.6 percent to 8,123.62 as foreign investors turned net buyers for the first time in 25 trading sessions.
Samsung Electronics soared 7.9 percent, SK Hynix climbed 2.3 percent and SK Square advanced 10.6 percent.
Australian markets rose sharply to hit a one-week high on signs of easing U.S.-Iran tensions and bets that the Reserve Bank of Australia will pause its tightening cycle on June 16.
The benchmark S&P/ASX 200 Index shot up 2 percent to 8,804, while the broader All Ordinaries Index closed up 1.9 percent at 9,006.10.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index ended 1.5 percent higher at 13,393.87, erasing losses from the previous session.
Europe
European stocks have moved sharply higher on Friday after U.S. President Donald Trump said a "great settlement" to end the conflict with Iran has been reached and that a signing ceremony could take place in Europe as early as this weekend.
Tehran, however, said no final deal has been approved and that disputes over frozen funds and Strait of Hormuz security remain unresolved.
In economic news, Germany's inflation slowed as initially estimated in May, largely reflecting the slowdown in energy price growth, final data from Destatis revealed.
Destatis confirmed that consumer price inflation weakened to 2.6 percent in May from 2.9 percent in April, which was the highest since December 2023.
Likewise, EU harmonized inflation slowed to 2.7 percent, as estimated, from 2.9 percent a month ago.
In France, consumer prices rose an annual 2.8 percent in May, marking the fastest pace since February 2024, according to the country's statistics agency INSEE.
Elsewhere, the U.K. economy contracted in April due to weakness in the services sector, the Office for National Statistics reported.
Real GDP posted a contraction of 0.1 percent in April, in contrast to a 0.3 percent expansion in March. This was the first monthly fall since August 2025 and also came in line with expectations.
Separate data revealed that the U.K.'s visible trade gap fell to GBP 26.05 billion in April from GBP 27.22 billion in March as exports increased amid falling imports.
The French CAC 40 Index is up by 1.6 percent, the German DAX Index is up by 1.3 percent and the U.K.'s FTSE 100 Index is up by 1 percent.
Banks were broadly higher, with Commerzbank, Deutsche Bank, BNP Paribas and Barclays rising 4-5 percent.
Travel and leisure stocks were also moving higher on softer crude oil prices. easyJet, Lufthansa and Air France surged 3-8 percent.
Kier, a leading infrastructure services, construction and property group, has also jumped on securing a contract extension worth about £140 million from South West Water.
Meanwhile, McBride shares have plunged in London after the private-label cleaning products agent issued a profit warning, citing higher raw material and energy costs.
U.S. Economic News
The University of Michigan is scheduled to release its preliminary report on consumer sentiment in the month of June at 10 am ET. The consumer sentiment index is expected to rise to 46.0 in June after falling to 44.8 in May.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.