06.04.202609:25 Forex Analysis & Reviews: Stock market on April 6: S&P 500 and NASDAQ gain sustained optimism

Yesterday, equity indices closed mixed. The S&P 500 rose by 0.11%, while the Nasdaq 100 jumped by 0.18%. The Dow Jones Industrial Average slipped by 0.13%.

Last Friday, markets were closed for a holiday. Today, index futures climbed and oil prices fell as investors received some reassurance that the six-week Middle East conflict may be easing. Media reports say that Iran is signaling support for a ceasefire.

The MSCI Asia Pacific index added 0.2%. Advancers and decliners within the index were roughly balanced, while technology stocks led gains. S&P 500 futures retraced prior losses and gained about 0.2%.

The positive tone was supported by reports that the United States, Iran, and a group of regional intermediaries are discussing terms for a potential 45-day ceasefire that could lead to a final resolution of the war. Reports that more vessels had transited the Strait of Hormuz also helped, despite increasingly aggressive threats from President Donald Trump to destroy Iranian power plants beginning Tuesday.

Brent crude pared earlier gains by 2.6% and was up 0.9% at roughly $110 a barrel, well below an intraday peak near $112. The 10-year US Treasury yield ticked down modestly as market participants began to reprice geopolitical risk. FX markets were mixed: the US dollar remained under moderate pressure amid improved risk appetite, while traditionally safe-haven currencies such as the yen and Swiss franc showed some weakness. The euro, by contrast, strengthened on improving economic prospects in the eurozone and reduced regional risk concerns. Gold, typically a barometer of geopolitical stress, also traded lower.

According to Maybank Securities, Asian markets, in particular, tend to react quickly to any sign that worst-case scenarios such as a complete halt to oil shipments can be avoided. That is why markets see a measured recovery, especially in sectors like semiconductors and cyclicals.

Clearly, traders are seizing on any headlines that can shift sentiment after the war with Iran darkened prospects and heightened inflation fears, undermining expectations of Fed rate cuts. Attention remains focused on energy prices and the status of the Strait of Hormuz, the key artery for Middle East oil flows.

As for the S&P 500 technical picture, the main task for buyers today is to overcome the nearest resistance level of $6,590. That would help the index gain upside momentum and could pave the way for a thrust to $6,603. Equally a priority for bulls will be control above $6,616, which would strengthen buyers' positions. In the event of a downside move amid reduced risk appetite, buyers must assert themselves around $6,577. A break below that level would quickly push the instrument back to $6,563 and open the way to $6,552.