US Equities Surge on Geopolitical Optimism and Cooling Producer Prices

Wall Street experienced a broad-based rally on Tuesday, with the Nasdaq leading gains at nearly 2%, the S&P 500 rising over 1%, and the Dow Jones Industrial Average climbing two-thirds of a percent. The surge was primarily driven by a combination of easing geopolitical tensions and favorable macroeconomic data. President Donald Trump indicated that negotiations to end the conflict with Iran could resume within the next two days, significantly boosting investor optimism and reducing the risk premium on equities. This geopolitical thaw coincided with a decline in oil prices, further supporting a risk-on environment. Inflationary pressures showed signs of cooling as March producer price data came in below expectations. The annual PPI was reported at 4%, missing the projected 4.6%, while core PPI—excluding food and energy—rose only 0.1% on a monthly basis, suggesting a gradual easing of price pressures. In the financial sector, first-quarter results were mixed. Citigroup shares hit a nearly two-decade high after beating profit estimates, sending shares up more than 2.5%. Conversely, Wells Fargo shares tumbled over 5.5% following a miss on interest income and revenue. JPMorgan Chase also saw shares end lower despite a profit beat, as CEO Jamie Dimon warned of mounting global economic risks. The transportation sector saw a sharp spike in activity following reports that United Airlines CEO Scott Kirby proposed a merger with American Airlines to the President. The prospect of a deal that could reshape the industry sent American Airlines shares up 8% and United Airlines up 2%.