Asia open: S&P 500 nabs records on US - Iran ceasefire extension amid Hot PCE inflation shock

• Global equities climbed to fresh record highs after the US and Iran agreed to extend their ceasefire, boosting risk appetite and driving strong gains in technology and AI-related stocks.
• Hotter-than-expected US core PCE inflation at 3.3% y/y reinforced the “higher for longer” interest rate narrative, further reducing expectations for Federal Reserve rate cuts under new Fed Chair Kevin Warsh.
• AI infrastructure and enterprise technology spending remain the dominant market driver, with blockbuster developments from Anthropic, Snowflake, Amazon, and Dell reinforcing the ongoing AI capex supercycle despite growing concerns over potential overcapacity.
• Chart of the day: Nasdaq 100 minor bullish trend intact, en route to another potential fresh all-time high at 30,728/795 with key short-term support at 29,700.

• US and Iran agree to extend ceasefire: The S&P 500 and Nasdaq bounced back to hit fresh record highs on Thursday after the United States and Iran officially agreed to extend their ceasefire. US Treasury Secretary Scott Bessent confirmed that a permanent agreement to completely wind down the three-month-old war is within reach, provided Iran satisfies key conditions, including uranium disposal and fully reopening the Strait of Hormuz.
• US core PCE inflation jumps to 3.3% y/y, creating policy “wedge”: The Bureau of Economic Analysis released April's Personal Consumption Expenditures (PCE) report, revealing that headline PCE inflation rose to 3.8% y/y (up from 3.5% in March). More critically, core PCE inflation (excluding food and energy) climbed to 3.3% y/y, creating a rare inflationary "wedge" by running significantly hotter than core CPI (2.8% y/y), further squashing hopes for Federal Reserve interest rate cuts.
• Anthropic secures staggering $965 Billion valuation: Artificial intelligence startup Anthropic closed a massive $65 billion funding round, vaulting its private valuation to $965 billion and rocketing past OpenAI. The firm is tracking to hit a $50 billion annualized revenue run-rate next month after Q1 sales expanded 80-fold.
• Snowflake inks $6B Amazon deal as tech earnings explode: Defying fears that AI automation would kill traditional enterprise software providers, Snowflake surged up to 35% after signing a landmark $6 billion deal with Amazon and upgrading its full-year sales forecast. Concurrently, Dell Technologies skyrocketed 40% in after-hours trading, following blowout quarterly results.

• The rare PCE-CPI inflation wedge: A significant structural challenge has emerged for newly confirmed Federal Reserve Chair Kevin Warsh. The Fed's preferred price barometer, the core PCE index, has broken higher to 3.3%, creating an unusual divergence from the 2.8% CPI benchmark. Because this underlying inflation spike stems directly from the Strait of Hormuz conflict choking global energy supplies, traditional monetary policy tools are constrained, and higher interest rates cannot lower oil transit costs but run the risk of severely bruising an already slowing economy.
• The K-shaped bifurcation of Wall Street vs. Main Street: The latest macro data dump exposes a profound macroeconomic split. Corporate profit margins remain near record highs as companies exploit structural supply shortages and the ongoing AI capex boom to drive revenues. Conversely, Main Street consumers are under acute duress; the U.S. personal savings rate plummeted to a near-historic low of just 2.6% in April, a level eclipsed in weakness only once in the past 18 years, as soaring gas prices near $5 a gallon erode real wage growth.
• AI Infrastructure overcapacity skepticism: Despite record-breaking stock market indices, a distinct undercurrent of institutional skepticism is building regarding the trillions of dollars pouring into AI capital expenditures. Several portfolio managers are warning of near-term overcapacity as commercial entities experience budget fatigue; for instance, Microsoft has begun cutting internal Claude code licenses due to prohibitive costs, while Uber has already entirely exhausted its 2026 AI coding capital allocation.

Equities: Wall Street rallied forcefully, with the S&P 500 gaining 0.6% to close at 7,563, while the tech-heavy Nasdaq 100 outperformed, hitting a fresh all-time high with a gain of 0.8%. Overall, Technology (1.4%) and Healthcare (1.3%) led, while defensive sectors, Consumer Staples (-0.6%) and Utilities (-1%) underperformed. Conversely, European bourses fell, with the FTSE 100 shedding 0.7% and DAX dropping 0.3%.

Fixed Income: Sovereign bond yields edged lower following the extension of the Middle East truce. The benchmark U.S. 10-year Treasury yield fell by roughly 3 basis points to anchor at 4.45% as the sovereign yield curve bull-flattened.

FX: The U.S. Dollar Index weakened by 0.2%, pulling the USD/JPY pair away from the critical 160.00 intervention line. Risk-sensitive currencies, the New Zealand Dollar (NZD) and Australian Dollar (AUD), led the G10 currencies higher with gains of 0.6% and 0.3% against the USD, while the South African Rand (ZAR) outperformed across emerging markets.

Commodities: rude oil prices extended losses, with Brent and WTI crude hitting close to six-week lows of $92.41/bbl and $88.52. In contrast, precious metals rebounded, supported by a pull-back in longer-term US Treasury yields, with spot gold surging 0.9% to settle at $4,496/oz, still below the 20-day moving average at $4,585/oz.

• Equity and currency volatility: Before the late-session Wall Street ceasefire bounce, regular-hour Asian equity benchmarks fell by up to 1% as they digested sticky global yields. Currencies stabilized slightly following the 0.2% drop in the greenback, relieving pressure on the Japanese yen near the 160 psychological threshold. Asia Pacific benchmark stock indices recovered sharply in today’s Asia opening session; Nikkei 225 (+1.9% to record high), Hang Seng Index (+0.4%), China A50 (+0.5%), KOSPI (+2.2% to record high), ASX 200 (+1%), and STI (+ 0.7%).
• Corporate labour and tech supply chains: Highlighting an immense structural divergence, Samsung Electronics' advanced chip workers secured a historic 10-year corporate pay package including bonuses of up to $416,000. These massive wins by a regional bellwether are expected to significantly harden the bargaining positions of other domestic unions, introducing structural wage inflation into the region.
• Derivative infrastructure race: Financial localization is accelerating. While U.S. exchanges prepare to launch futures contracts tied to raw computing rental power, China is actively designing a brand-new futures market for AI tokens used to price localized AI services, sparking a structural derivatives race with Washington.

1. Japan Consumer Confidence (May) - 1:00 pm SGT (consensus:32, Apr:32.2) Impact: USD/JPY, JPY crosses, Nikkei 225
2. Germany Harmonised Inflation Rate Prelim (May) - 8:00 pm SGT (consensus: 2.8% y/y, Apr: 2.9%) Impact: EUR/USD, EUR crosses, DAX
3. Fed Speak - Bowman (9.10 pm SGT), Paulson (9.15 pm SGT) Impact: Short-end US Treasuries, USD, US stock indices
4. US-Iran peace deal news flows Impact: All asset classes

The intraday decline of 2% seen in the US Nasdaq 100 CFD (a proxy of the Nasdaq 100 E-mini futures) measured from Wednesday, 27 May US session high to Thursday, 28 May Asia session low has hit an inflection level at 29,700.

Thereafter, it staged a bullish reversal, which suggests that its minor uptrend phase from the 19 May 2026 low remains intact.

Watch the 29,700 key short-term pivotal support, and a clearance above 30,425 sees the next intermediate resistances coming in at 30,728/795 (upper boundary of the ascending channel & Fibonacci extension cluster) and 31,050 (Fibonacci extension).

On the other hand, a break and an hourly close below 29,700 negates the bullish tone for a minor corrective decline to expose the next intermediate supports at 29,433 and 29,110 (also the 20-day moving average).