Tech rebound and Iran optimism fuel risk rally in US markets

Market snapshot:

• WTI crude fell $4.77 to $86.05
• US 10-year yields edged up 1 bps to 4.87%
• Gold gained $77 to $4142
• NZD outperformed, USD underperformed
• S&P 500 rose 2.3%, Nasdaq climbed 2.7%

Risk assets staged a strong comeback on Monday, driven by dip buying in tech stocks and falling oil prices.

Late Friday, a report that Anthropic is proceeding with its IPO gave the tech market a boost. Further confirmation emerged on Monday when the company launched a new frontier model and reports indicated that IPO marketing will commence tomorrow. That development helped offset the honeypot story that had pushed Nvidia shares down over 8% at the opening. The decline was later trimmed to 4.4%, but the broader market surged, with AMD shares leaping by double digits. Heavily sold AI infrastructure stocks and memory names also rallied.

Steady positive news emerged regarding Iran, including a late report of a constructive conversation between Qatari mediators and former President Trump. Iran also reportedly consented to nuclear negotiations, with both sides agreeing to enrichment at normal civilian-use levels. Oil prices fell below the 200-day moving average, reaching the lowest in two months. However, there have been various cautions and denials, and little official confirmation, especially from the Iranian side.

Overall, the S&P 500's advance was its largest since April 8, while the Nasdaq had its best day since July 30. The next key data point is Tuesday's US CPI report.