Double relief

Double relief for equity markets.

First, oil prices are now back close to pre-war levels. The initial agreement to end the war with Iran has eased fears around energy supply, and tanker traffic through the Strait of Hormuz is gradually normalizing. Even if more difficult discussions still lie ahead, notably around Iran’s nuclear program and broader regional stability, markets have, for now, removed part of the geopolitical risk premium.

Second, the AI theme is still fully alive and kicking. Micron came out with very strong results after the close. The company reported record quarterly revenue and guided for approximately USD 50 billion of revenue in its fiscal fourth quarter, clearly above expectations. Micron has also secured 16 strategic customer agreements, which should improve visibility and reduce some of the boom-and-bust volatility that has historically characterized the memory chip industry.

The shares climbed strongly in after-market trading following the release.

The party goes on, for now.