The United States and Iran signed an electronic agreement late Wednesday to end the conflict between the countries. U.S. stock futures rose in the overnight session following the announcement. The 14-point Memorandum of Understanding establishes a 60-day negotiation period to finalize a broader settlement. The agreement offset concerns from the Federal Reserve's indication that a rate hike remains possible this year, as the central bank left interest rates unchanged in Kevin Warsh's first policy meeting as chair amid persistent inflation and a strong labor market.
Dow futures were up 0.58%, S&P 500 futures gained about 0.81%, and the Nasdaq 100 futures traded 1.32% higher as of 9.43 p.m ET. The SPDR S&P 500 ETF (SPY), the Invesco QQQ Trust (QQQ) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) all climbed higher. The iShares 20+ Year Treasury Bond ETF (TLT) was trading up about 0.29%.
On Wednesday, the Dow Jones Industrial Average closed down 0.98% at 51,492.55. The S&P 500 was down 0.57% at 7,420.10, and the Nasdaq Composite fell 1.34% to 26,021.66.
US and Iran Sign 14-Point Peace Framework
The United States and Iran electronically signed a 14-point Memorandum of Understanding that extends their ceasefire and establishes a framework for a peace agreement. The deal outlines a 60-day negotiation period, which can be extended, to finalize a broader settlement.
As part of the deal, the U.S. will begin lifting its naval blockade of Iran and restore pre-war military deployments within 30 days. Iran will facilitate the reopening of the Strait of Hormuz, allowing commercial shipping to resume without transit fees.
The agreement outlines plans for a $300 billion reconstruction and development framework for Iran, backed by regional partners, while paving the way for the eventual removal of U.S. and international sanctions. It also provides for the phased release of Iran's frozen assets.
The final deal is scheduled to be officially signed on Friday by Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf in Switzerland.
Federal Reserve Holds Rates Unchanged Under Kevin Warsh
The Federal Reserve left interest rates unchanged at Kevin Warsh's first policy meeting as chair amid persistent inflation and a strong labor market. Rising energy prices linked to the Iran conflict added to price pressures.
Updated projections showed officials now expect one rate hike in 2026, with the median federal funds rate forecast rising to 3.8%, up from 3.4% in March. The Fed raised its year-end inflation outlook, projecting headline PCE inflation at 3.6% and core inflation at 3.3%.
"The Fed held rates steady but spoiled the mood with a much more hawkish dot plot. Elevated inflation makes that understandable, but the committee is far from united, with only about half still penciling in rate hikes later this year," Sonu Varghese, chief macro strategist at Carson Group, told CNBC. "The bigger point is that policy still looks loose for an economy where inflation remains a problem, and the labor market is stabilizing."
Rumble Surges on Rebranding Announcement
Shares of Rumble Inc. (RUM) surged more than 18% in the overnight session after it announced its rebranding to RUM Group Inc. and renamed its cloud division Quake AI following the completion of its acquisition of Northern Data.
Intel Begins Production of 18A-P Chip Process
Intel Corp. (INTC) announced that it has begun production of its advanced 18A-P chip process. Bernstein analyst Stacy Rasgon raised the price target on Intel to $100 from $65 on Wednesday. CNBC's Jim Cramer believes the stock still has room to run, even after surging nearly 240% this year.
Netflix on Track for Fourth Consecutive Monthly Decline
Shares of Netflix Inc. (NFLX) are on track for a fourth consecutive month of declines amid a series of failed acquisition attempts, including its latest unsuccessful bid for Roku Inc. (ROKU).
Rackspace Technology Extends Rally on AMD Partnership
Shares of Rackspace Technology Inc. (RXT) closed up more than 21% on Wednesday, extending the rally overnight after an RBC Capital report highlighted the company's partnership with Advanced Micro Devices (AMD) as a key growth catalyst.
Oil Prices Decline Following Peace Deal
Oil prices declined in the overnight session late Wednesday after the U.S. and Iran signed the peace deal electronically. Brent crude futures expiring in August were down about 1.46% to trade at around $78.39 a barrel. WTI crude futures expiring in July fell 1.59%, trading around $75.57 a barrel.
Yields on the 10-year Treasury were at 4.463%, and gold prices climbed to around $4,319.96 an ounce.
Asian Markets Trade Mixed at Thursday Open
Asian markets were trading mixed at the open on Thursday. South Korea's KOSPI hit a fresh record high in the intraday session, climbing to 8,976.55. Japan's Nikkei 225 was up about 1.85% at the time of writing. China's SSE Composite index and Australian stocks were edging lower at the open.
FAQ
What did the US and Iran agree to in the electronic agreement signed late Wednesday?
The United States and Iran signed a 14-point Memorandum of Understanding that extends their ceasefire and establishes a framework for a peace agreement. The deal outlines a 60-day negotiation period to finalize a broader settlement. The U.S. will begin lifting its naval blockade of Iran and restore pre-war military deployments within 30 days, while Iran will facilitate the reopening of the Strait of Hormuz. The agreement also outlines a $300 billion reconstruction framework for Iran and provides for the phased release of Iran's frozen assets.
Why did the Federal Reserve leave interest rates unchanged?
The Federal Reserve left interest rates unchanged at Kevin Warsh's first policy meeting as chair amid persistent inflation and a strong labor market. Rising energy prices linked to the Iran conflict added to price pressures. Updated projections showed officials now expect one rate hike in 2026, with the median federal funds rate forecast rising to 3.8%. The Fed raised its year-end inflation outlook, projecting headline PCE inflation at 3.6% and core inflation at 3.3%.
Why did Rumble Inc. shares surge more than 18% in overnight trading?
Shares of Rumble Inc. (RUM) surged more than 18% in the overnight session after the company announced its rebranding to RUM Group Inc. and renamed its cloud division Quake AI following the completion of its acquisition of Northern Data.
