- S&P 500 +0.09%
- Nasdaq Composite +0.14%
- Dow Jones +0.20%
The major US stock indices opened higher today as the US-Iran deal optimism continues to be a tailwind for risk assets. Earlier in the session, Iran’s state TV said that it has a draft of the initial unofficial framework for the Memorandum of Understanding (MoU) with the US.
According to the draft, US military forces will withdraw from vicinity of Iran and lift the naval blockade. In return, Iran has committed to restoring the number of commercial transit ships through Hormuz Strait to pre-war levels within one month. If a final deal is reached within 60 days, this agreement will be approved in the form of a binding UN Security Council resolution.
The caveat is that the framework has not been finalized yet and no step will be taken by Iran without “tangible verification”. Markets initially spiked on the news but the gains eventually faded as nothing has been agreed yet.
On the Federal Reserve side, Fed’s Kashkari said this morning that the FOMC should have a neutral policy outlook going forward as the risk to US inflation is now higher than the risk of labour market deterioration. This is now basically the consensus among policymakers, and even Fed’s Waller recently changed his stance
