|

S&P 500: Risk rally extends after Iran headlines – Deutsche Bank

Deutsche Bank analysts highlight a powerful rebound in US equities, with the S&P 500 posting its best daily gain since May last year as Iran-related headlines boosted risk sentiment. Tech, airlines and breadth indicators all improved, while volatility fell sharply, and CBOE Volatility Index (VIX) saw its biggest daily decline since last April.

US equities surge as volatility retreats

"What had been a torrid month of March for markets ended on a positive note yesterday, as the S&P 500 (+2.91%) posted its best day since last May as comments by US and Iranian officials drove hopes that an end to the Iran war could be coming closer into view."

"...US equities delivered a stunning rebound as the S&P 500 rose by +2.91%, its best day since May 12 last year, the day that US and China agreed to defuse their post-Liberation Day tariff escalation."

"The NASDAQ (+3.83%) and the Mag-7 (+4.48%) outperformed as tech stocks led the gains, while the S&P 500 airlines sector rebounded by +5.77%."

"The rally was also a broad one, with 421 advancers in the S&P 500, the most year-to-date, while the VIX index (-5.36pts to 25.25) saw its biggest daily decline since last April."

"Yesterday’s cross-asset rally came at the end of what has been a pretty torrid month and quarter for markets..."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

More from FXStreet Insights Team
Share:

Editor's Picks

AUD/USD seems vulnerable near 0.6800, 10-month low amid bullish USD

AUD/USD languishes near a 10-month low during the Asian session on Friday, awaiting a break below 0.6800 before the next leg up amid a bullish US Dollar. Firming Fed rate-hike expectations, along with fading hopes for US-Iran diplomacy, help the USD hold gains at its highest level since April 2025. Moreover, the RBA’s dovish tilt undermines the Aussie and backs the case for further losses.

USD/JPY bulls turn cautious near 160.00 amid intervention risks

USD/JPY enters a bullish consolidation phase around its highest level since early September as bulls turn cautious amid intervention risk near 160.00. Meanwhile, the downside seems cushioned as the wide US-Japan interest rate gap keeps the Yen carry trade active. Furthermore, the possibility of a jumbo Fed rate hike and Middle East uncertainties hold the US Dollar near a 19-month top, supporting the currency pair.



Gold sticks to gains above $3,900; bulls lack conviction as Fed and Iran risks support USD

Gold clings to modest recovery gains above the $3,900 mark during the Asian session, snapping its three-day losing streak to the lowest level since late September set the previous day. The US Dollar takes a breather after a strong three-day rally to its highest level since April 2025, offering some support to the commodity. However, firming US Federal Reserve rate-hike expectations and Middle East uncertainties continue to support the Greenback. This keeps a lid on any further upside for the precious metal.

Bitcoin just posted five straight losing weeks, and the storm may not be over yet

Bitcoin is struggling to find support, slipping below $70,000 as multiple headwinds threaten to push the Crypto King lower. The much-anticipated “Uptober” rally failed to materialize, with persistent selling pressure and widespread liquidations instead reinforcing the “Rektober” narrative.

Week ahead – Fed Minutes, inflation data and Nvidia earnings to guide investors

Fed minutes may add to hawkish tone as bets of 50-bps hike grow. Nvidia to report earnings as bar to impress high after spy scandal. Trade and geopolitics to be focal point of Trump-Xi summit.

What the US CPI headline doesn’t tell you about inflation

Brent crude has fallen about a third since mid-October on hopes the Iran war is ending, but diesel, freight and fertiliser costs haven't followed. Those costs reach US consumer prices in stages through 2027 and could keep inflation high after gasoline gets cheaper.