U.S. stock markets opened with a mixed performance on Friday.
The Dow Jones Industrial Average opened higher by 287.29 points, or 0.56%, to 51,136.04. The S&P 500 index gained 15.69 points, or 0.21%, to 7,409.99. The Nasdaq Composite index edged down by 6.38 points, or 0.03%, to 25,803.28.
Global equity markets were higher on Friday. Japan's Nikkei 225 index surged 2.8%, India's Nifty 50 rose 1.3%, South Korea's Kospi gained 4.6%, and China's Shanghai Composite was up over 1%. In Europe, the Stoxx 600 index advanced 1.7%.
Reports indicated the United States and Iran are nearing a peace agreement. Iranian state media reported that a draft memorandum of understanding includes a U.S. commitment to lift oil sanctions and an Iranian pledge to reopen the Strait of Hormuz.
Media reports on Friday, citing sources familiar with the matter, suggested a peace deal could be signed in Switzerland as early as Sunday.
Markets had already risen on Thursday, buoyed by a rebound in chip stocks and comments from the U.S. President hinting that a deal with Iran was imminent.
Investor attention is also centered on the Nasdaq debut of Elon Musk's SpaceX (NASDAQ: SPCX). The company is set to list with a share price of $135, giving it a valuation of $1.77 trillion.
The company plans to issue 555.6 million shares, aiming to raise $75 billion, which would make it the largest initial public offering in history. This size is more than triple the $22 billion IPO of Alibaba in 2014, which remains the largest U.S. IPO to date.
If the IPO proceeds as planned, it could act as a significant catalyst for the market on Friday. However, some investors are concerned that the massive size of the offering could create pressure on the market.
Even if the market can absorb the new SpaceX shares, IPOs are inherently volatile, and Friday's listing could trigger another rotation in market leadership, particularly in tech stocks, as investors may need to sell existing holdings to raise funds for the new offering.
"History shows that large IPOs tend to occur during periods of strong market sentiment, but the new supply of shares can lead to indigestion," said Douglas Bice, a global equity strategist at Wells Fargo Investment Institute. "U.S. household equity allocations are near historical highs, meaning they may need to sell existing positions to finance these new ones."
"Combined with ongoing geopolitical tensions and the upcoming mid-term elections, this could be another reason for the market to exhibit greater volatility in the second half of the year," he added.
He further noted, "We remain positive on the AI theme and the information technology sector but are not chasing this rally." He pointed out that as of May 29th, the sector had risen 37% since April, compared to a 17% gain for the S&P 500 over the same period.
Thursday's gains pushed the S&P 500 and Nasdaq Composite back into positive territory for the week, with weekly gains of 0.14% and 0.39%, respectively. The blue-chip Dow Jones Industrial Average lagged, on track for a weekly decline of 0.04%.