investingLive Americas FX news wrap 6 May Risk-on rally lifts stocks; oil falls on peace

NASDAQ and S&P close at record levels. Dow breaks 50 K but backs off into the close. Fed's Goolsbee warns Iran war turning into an inflationary shock for U.S. economy Dow reaches 50,000. There have been 4 closes above the 50K level Fed's Goolsbee: Impact of rising productivity on inflation remains active topic of debate Trump: WIll not let Iran have a nuclear weapon WSJ: Iran & US mediators are hammering out a one page 14 point memorandum of understanding Weekly crude oil inventories for the current week fall -2.313 million vs -3.291M estimate Iran update: Conflicting messages from Israel. France says they can make the Hormuz safe. Fed’s Musalem: Inflation risks remain front and center US April ADP employment +109K vs +99K expected investingLive European markets wrap: End in sight to US-Iran war? Or another false dawn? Trump's ultimatum: If Iran doesn’t agree to deal, the bombing will start at higher level Before North American traders entered for the day, reports surfaced suggesting that the U.S. and Iran were moving closer to a potential peace agreement. The headlines fueled a strong risk-on move across financial markets, sending stocks sharply higher, Treasury yields lower, and the U.S. dollar broadly weaker. Oil prices plunged on hopes that tensions in the Middle East could ease and that disruptions to energy flows through the Strait of Hormuz might eventually subside. Crude oil initially tumbled to a session low of $88.66 before rebounding modestly. Even with the bounce, prices remain sharply lower on the day, with crude currently trading near $95.62, down roughly $6.60 or -6.5%. The equity market embraced the improving geopolitical backdrop. Both the S&P 500 and the NASDAQ Composite closed at fresh record highs, while the DJIA briefly traded back above the key 50,000 milestone for the first time since February 12 before slipping modestly below that level into the close. Despite the late pullback, the Dow still gained 612 points, or 1.24%, while the NASDAQ surged 2.02% and the S&P advanced 1.46%. In the U.S. debt market, Treasury yields moved lower across the curve as traders rotated toward safer fixed-income assets and priced in reduced inflation pressure from falling energy prices. Yields declined by roughly 6 to 7 basis points. The 2-year Treasury yield fell 6.8 basis points to 3.96%, while the 10-year yield dropped 6.6 basis points to 4.3499%. For perspective, the recent cycle highs reached 4.027% for the 2-year and 4.484% for the 10-year note. In the foreign exchange market, the U.S. dollar weakened broadly. The largest declines came against the NZD, JPY, and AUD as improving risk sentiment and lower yields weighed on the greenback. The dollar fell -1.17% versus the NZD, -0.96% against the JPY, and -0.74% versus the AUD. The smallest decline came against the CAD, where the dollar slipped just -0.10%, with falling oil prices helping to offset broader USD weakness. Aside from the geopolitical headlines, the economic calendar featured the ADP employment report for April. The report pointed to a strengthening U.S. labor market, with private payroll growth accelerating at the fastest pace since January 2025. Service-sector hiring led the gains, adding 94K jobs compared with 32K last month, while goods-producing industries added 15K jobs versus 30K previously. Expectations for a strong report had already been elevated following a series of firm weekly ADP updates, with some forecasts as high as 120K, reinforcing the growing view that the labor market has not only stabilized but may be strengthening again. By company size, small businesses added 65K jobs, down from 85K previously, while medium-sized firms added just 2K after losing 20K last month. Large companies added 42K jobs following a 4K decline in the prior report, highlighting stronger hiring trends among larger employers. ADP noted that health care, along with a rebound in trade, transportation, and utilities, helped fuel the acceleration in hiring. The agency also