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Wednesday, May 06, 2026
What’s happening: US stocks surged on Tuesday after Washington reaffirmed the ceasefire deal with Iran.
What happened: The S&P 500 and Nasdaq jumped to record highs on Tuesday, driven by gains in Intel and other AI stocks.
The US agreed to pause efforts to help stranded vessels exit through the Strait of Hormuz due to progress made in talks with Iran.
Why it matters: US President Donald Trump had announced a naval mission called “Project Freedom” to help commercial vessels stranded in the Strait of Hormuz. An exchange of fire also triggered concerns over the durability of the ceasefire between the US and Iran.
The UAE also said its air defence had intercepted Iranian missiles and drones, while confirming a fire at its Fujairah oil terminal.
US Defence Secretary Pete Hegseth said on Tuesday that the ceasefire is still on, while Trump added that “great progress” was being made towards a “complete and final agreement” with Iran.
The Strait of Hormuz has been virtually closed since the beginning of the conflict, impacting around 20% of global oil supplies and raising concerns over an energy crisis and inflation. Hopes of a resolution and the reopening of the Strait lifted investor sentiment and eased speculations of central banks needing to hike their benchmark interest rates this year.
Meanwhile, data released by the US on Tuesday signalled a strong labour market. Although the ISM services PMI fell to 53.6 in April from 54 in March and came slightly below market estimates of 53.7, the figure was above last year’s average levels.
Job openings in the US declined by 56,000 to 6.866 million in March, compared to market estimates of 6.84 million. Sales of new single-family homes surged 7.4% to 682,000 in March, up from 635,000 in the previous month and surpassing market estimates of 650,000.
Shares of Intel rose around 13% on Tuesday amid reports of Apple using the company as a backup chip supplier.
Pinterest’s stock jumped around 7% after the company issued a strong second-quarter revenue forecast. Archer-Daniels-Midland’s shares also rose almost 4% following upbeat first-quarter results.
All major sectors closed the session on a positive note, with materials, information technology and industrials stocks recording the highest gains.
The Dow Jones index jumped 356.35 points, or 0.73%, to close at 49,298.25 on Tuesday, while the S&P 500 added 0.81% to reach 7,259.22. The Nasdaq 100 climbed 1.31% to settle at 28,015.06.
What to watch: Investors will continue monitoring developments related to the US-Iran war.
Data on ADP employment change (1615 UAE Time) will be released today. Private businesses in the US, which added 62,000 jobs in March following the previous month’s 66,000 jobs, are expected to add 99,000 jobs in April.
Context: The Canadian dollar rose versus the US dollar this morning as investors digested the latest economic data.
Details: Data released on Tuesday showed that the S&P Global Canada composite PMI climbed to 49.9 in April from 47.6 in the previous month, nearing the neutral 50 level and indicating some stabilisation in the region’s business activity.
Canada’s S&P Global services PMI business activity index rose to 49.2 in April from 47.2 in the previous month.
Canada recorded a trade surplus of C$1.8 billion in March, versus a deficit of C$5.1 billion in February. The figure came in better than market estimates of a deficit of C$2.9 billion and was the first trade surplus since September 2025. Canada’s exports jumped 8.5% to C$72.8 billion in March, the highest reading since January 2025, while imports declined 1.6% to C$72.8 billion in March.
Weakness in the US dollar lent further support to the loonie this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.2% to 98.30.
However, lower prices of crude oil, one of Canada’s major exports, weighed on the Canadian currency. Spot price for WTI crude oil fell 1.9% to $102.40 per barrel this morning.
The USD/CAD pair fell more than 0.1% to 1.3603 this morning.
What to watch: Investors will continue monitoring talks between the US and Iran to end the conflict.
Data on Ivey PMI (1800 UAE Time) from Canada will be released today. Canada’s Ivey PMI, which dipped to 49.7 in March from 56.6 in the previous month, is expected to rise to 49.9 in April.
Other Markets: Asian indices traded higher this morning, with Hong Kong’s Hang Seng index and China’s CSI 300 Index up by 0.50% and 1.47%, respectively.
Russia announced drone and missile attacks on Ukraine, just hours before the start of Kyiv’s ceasefire. The news sent the USD/RUB pair lower in forex trading this morning.
China’s RatingDog general services PMI rose to 52.6 in April from the previous month’s three-month low of 52.1. The latest reading topping market estimates of 52 exerted pressure on the USD/CNY forex pair.
Philippines’ unemployment rate eased to 5% in March from 5.1% in the previous month. The jobless rate declining to the lowest level in three months sent the USD/PHP pair lower in forex trading this morning.
Singapore’s S&P Global PMI rose to 57.9 in April from 56.7 in the previous month. This being the 15th consecutive month of growth in the private sector exerted pressure on the USD/SGD forex pair.
Hong Kong’s S&P Global SAR PMI declined to 48.6 in April from 49.3 in the previous month. Private sector PMI falling to its lowest level since June 2025 lent support to the USD/HKD pair in forex trading this morning.
Eurozone’s S&P Global composite PMI (1200 UAE Time), S&P Global services PMI (1200 UAE Time) and PPI (1300 UAE Time), Italy’s retail sales (1200 UAE Time), UK’s S&P Global composite PMI (1230 UAE Time) and S&P Global services PMI (1230 UAE Time), Germany’s new car registrations (1400 UAE Time), US MBA mortgage applications (1500 UAE Time), treasury refunding announcement (1630 UAE Time), EIA crude oil stocks change (1830 UAE Time), Mexico’s gross fixed investment (1600 UAE Time) as well as Brazil’s S&P Global services PMI (1700 UAE Time) and S&P Global composite PMI (1700 UAE Time).
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