Tech Stocks Rally as Geopolitical Tensions Ease

A temporary US-Iran truce triggered a 3% surge in Nasdaq 100 futures and a historic 19% oil price drop, reshaping inflation and Fed policy outlooks for tech stocks.

A sudden de-escalation in US-Iran hostilities triggered an immediate wave of relief across financial markets. The announcement of a temporary ceasefire sent Nasdaq 100 futures soaring by nearly 3%, while oil prices recorded their most severe single-day drop in almost six years. This marked a sharp reversal from Tuesday's trading session, which had seen the index drift sideways with key technology stocks under pressure until the after-hours news broke.

Market Sentiment Shifts on Ceasefire News

Throughout Tuesday, investor anxiety was palpable. Oil prices climbed toward $115 per barrel, and shares of major tech companies like Nvidia, Tesla, and Apple declined as the market awaited a response to the US ultimatum. The mood shifted abruptly after 8 PM Eastern Time when the announcement of a two-week truce was made public via social media and subsequently confirmed by Iran. The agreement stipulated that should attacks cease, Iranian operations would also halt, ensuring the Strait of Hormuz remains navigable for the fortnight.

The reaction was swift and pronounced. West Texas Intermediate crude oil plummeted by as much as 19%, with Brent crude falling to $91.70 per barrel. This dramatic drop in energy costs has significant implications for inflation forecasts and, consequently, the policy calculus of the US Federal Reserve. Previously constrained by the oil price shock, the central bank may now find renewed scope for monetary easing—a structural positive for interest-rate-sensitive technology equities.

Broadcom Surges as Apple Stumbles

Broadcom emerged as the standout performer, its shares having already gained 6% on Tuesday. The catalyst was an expansion of its artificial intelligence agreements with Google and Anthropic, which includes taking over the development of Google's custom AI chips. The stock added another 3% on Wednesday.

In contrast, Apple faced significant headwinds. Reports from Nikkei Asia detailing testing phase complications for its planned foldable iPhone sent shares down nearly 4% on Tuesday. Although Bloomberg later reported the device remained on track for a September launch, the damage to investor sentiment was already evident.

Intel provided a positive surprise, with its stock advancing after the company announced a $14.2 billion deal to repurchase a 49% stake in its Irish Fab 34 facility from Apollo Global. Year-to-date, Intel shares are up 36%.

Tesla continues to face structural challenges. Analysts at JPMorgan highlighted disappointing delivery figures of 358,023 vehicles worldwide, which came in 4% below the Bloomberg consensus estimate. The stock has declined 22% since the start of the year.

Technical Picture at a Critical Juncture

The Nasdaq 100 opened Wednesday at 24,143 points, climbing as high as 24,265—bringing it into the vicinity of its technically crucial 200-day moving average around 24,410. A sustained close above this level is viewed by analysts as necessary to improve the broader technical outlook. The index remains down 8.8% for the year, representing a loss of approximately $2 trillion in market capitalization.

The technical indicators present a mixed picture: eight out of twelve moving averages continue to flash sell signals. The Relative Strength Index (RSI) stood at 30.5% at the end of March, though the futures rally is expected to push this reading significantly higher by Wednesday's close.

Whether this recovery can be sustained depends heavily on Iran's adherence to the Strait of Hormuz commitments. One market strategist cautioned that a two-week ceasefire may, in practice, equate to little more than maintaining the current heightened status quo, with oil, gasoline, and jet fuel prices remaining elevated. Further clarity is anticipated from US inflation data due Friday and Delta Air Lines' quarterly results on Wednesday, which will be scrutinized closely given the recent shock to jet fuel costs.