IBM stock leads Dow Jones higher as Iran signals desire for de-escalation

IBM stock reaches a new all-time high above $284.
US stocks benefit from Iran signaling it's ready for a ceasefire.
Oil prices fall over 3% on Monday due to possible end to Israel-Iran hostilities.
IBM continues to benefit from its planned Quantum Starling project.

Clay Webster FXStreet

International Business Machines (IBM) led the Dow Jones Industrial Average (DJIA) at the start of trading on Monday, reaching a new all-time high above $284. Then the newswires sprang alive with headlines saying that Iran has sent signals to Gulf Arab states to work out a deal to end the hostilities that Israel launched last Thursday. Iran is reportedly telling intermediaries that it will restart nuclear negotiations with the United States if the latter doesn't aid Israel in its offensive war.

The Dow Jones rises 0.9% in the late morning session, while the S&P 500 and NASDAQ both advance over 1%.

This has helped US equities launch higher, and now several Dow stocks have surpassed IBM's early lead. These include Goldman Sachs (GS), JPMorgan (JPM), Nvidia (NVDA) and American Express (AXP), which have all advanced over 2% at the time of writing. WTI Oil has sold off 3.5%, and Gold is down nearly 1% as the risk-on sentiment takes over.

Additionally, the European Union has signaled that it is interested in accepting the United States' 10% tariff on its goods and might also make it easier to sell US-made vehicles in Europe.

IBM stock news

IBM shares are still being lifted by the company's announcement on June 10 that it would commence building what it called the "world's first large-scale, fault-tolerant quantum computer”. The company already operates an international fleet of quantum computers, but said the planned IBM Quantum Starling facility in Poughkeepsie, New York, will be able to run 20,000 times more operations than existing quantum computers.

This news has helped IBM stock receive attention from the hot quantum computing sub-sector, which has been rallying strongly this year. D-Wave Quantum (QBTS) and Rigetti Computing (RGTI) have both soared recently after raising substantial funds from new equity shelf offerings. IonQ (IONQ) has also rallied after acquiring Oxford Ionics for $1.08 billion.

IBM stock forecast

IBM stock has risen to a new all-time high of $284.50 on Monday after selling lower on both Thursday and Friday. With the Israel-Iran conflict looking to ease this week, there is room for more gains.

However, the Relative Strength Index (RSI) has already reached overbought territory at 71, though this is better than last Wednesday's 74 reading. The best bet is for the share price to rise but at reduced momentum from here.

Any pullback should find safety in the prior resistance between $265 and $270. Below there lies longer-term support around the $140 vicinity. The 50-day Simple Moving Average (SMA) sits near $252, and the 200-day SMA is rising near $235.

IBM daily stock chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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