Nasdaq 100 futures are surging 1.4% as a US-Iran peace deal drives a relief rally, countering the Fed's hawkish signals. Chip stocks lead the gains ahead of the holiday weekend. Is the rally sustainable?
Nasdaq 100 futures are surging 1.4% in early Thursday trading, leading a broad risk-on reversal after the signed US-Iran peace deal gave tech bulls exactly the catalyst they needed to shake off Wednesday's hawkish Fed hangover.
S&P 500 futures (ES) are up 0.8% and Dow futures (YM) are adding 0.6%, but it's the Nasdaq complex doing the heavy lifting.
From a 507-Point Drop to a Premarket Rip
Wednesday was ugly. The Dow shed 507.12 points, or 0.98%, to close at 51,492.55 after earlier touching a fresh intraday record — the index's third straight all-time high before the Fed yanked the rug out.
The S&P 500 lost 1.21% to settle at 7,420.10, and the Nasdaq Composite dropped 1.34% to 26,021.66, with mega-cap weight Microsoft, Meta, Alphabet, and Amazon all closing red.
The damage traced directly to Kevin Warsh's first FOMC press conference as Fed Chair, where a dot plot showing nine of 18 voting members projecting a 2026 rate hike, six of them penciling in two, sent the 2-year yield up more than 16 basis points to 4.216% inside the session.
Federal Reserve Dot Plot Table
Source: CME FedWatch
Then the calculus flipped overnight. The U.S. and Iran formally signed their interim peace agreement, and a senior U.S. official confirmed the memorandum of understanding has taken effect, clearing the way for the Strait of Hormuz to reopen and Iranian crude sanctions to lift.
Crude oil cratered in response, WTI fell more than 1.7% to the mid-$74 area, its lowest level since early March, and that's the chain reaction now running straight through equity futures.
Lower energy costs ease one of the inflation inputs the Fed cited as justification for its hawkish dot plot, and risk appetite snapped back across Asia overnight, with Japan's Nikkei and South Korea's Kospi both notching fresh record highs.
The Chip Trade Is Doing the Lifting
The Nasdaq 100's outsized gain isn't a uniform mega-cap rally, it's being driven by names with direct exposure to the Iran-deal/oil unwind and a semiconductor complex that's spent the past two weeks digesting its own separate volatility. SpaceX, Marvell, Micron, Intel, and Broadcom are the standout premarket movers, picking up where Wednesday's session left off: chip stocks had already rallied into the FOMC decision, with the Invesco PHLX Semiconductor ETF up 2.4% and ASML and Intel each gaining 4% to lead the advance even as the broader tape fell apart post-Warsh.
That bifurcation matters for anyone trading Nasdaq specifically rather than S&P 500. Semis have been the most volatile corner of the Nasdaq 100 all month, Micron alone is up 258% year-to-date on AI-driven memory demand even after sharp pullbacks tied to Broadcom's earnings disappointment two weeks ago.
A relief rally that's concentrated in chips and SpaceX-adjacent names will move NQ disproportionately versus a broad-based, low-dispersion rally, and that's exactly the pattern setting up this morning.
SpaceX itself remains a wildcard. The stock briefly pushed its market cap above Amazon's and past Microsoft's earlier this week before sinking on Wednesday in what looked like ordinary profit-taking after a red-hot debut.
Thursday's bounce will be an early read on whether that pullback was just digestion or the start of a deeper post-IPO cooldown — important context given the stock's growing index weight and its outsized influence on intraday Nasdaq volatility regardless of S&P 500 inclusion timing.
What This Rally Is — and Isn't
The key thing for futures traders to separate out: this is a relief rally built on a geopolitical de-escalation, not a reversal of the Fed's hawkish signal.
The dot plot didn't change overnight. The median fed funds projection for year-end 2026 still sits at 3.8%, up from 3.4% in March, and Warsh's own abstention from submitting a dot remains, in the market's read, a deliberate signal of intent rather than indecision.
Treasury yields are still elevated — the 10-year was holding near 4.46% to 4.49% as of Thursday morning, and a narrowing 2s10s curve continues to argue that rates are staying higher for longer regardless of what crude oil does this week.
US 10Y Yield, June 18, 2026
Source: TradingView
That distinction sets up the more interesting question heading into the session: does today's bounce hold once the easy oil-driven relief is priced in, or does the tape circle back to digesting a Fed that's now explicitly entertaining hikes?
With Wall Street closed Friday for Juneteenth, today's session is effectively the last full day of price discovery before a three-day weekend — thin holiday liquidity tomorrow could exaggerate any reversal if today's gains prove to be more sentiment-driven than fundamentally supported.
Bull / Base / Bear Case
Nasdaq 100 Futures Four-Hour Chart, June 18, 2026
Source: TradingView
Nasdaq 4-hour has bounced off the 100-day MA overnight and looks like it wants to retest the recent highs at 30,975.
The RSI sits at a healthy 56.50, indicating substantial room for continuation higher.
The short-term trend remains bullish as long as price holds above the 100-day MA.
Bull case: The Iran deal holds, the Strait of Hormuz reopening proceeds without incident, and falling energy costs feed directly into softer inflation prints over the coming months — giving Warsh's FOMC room to walk back hike rhetoric at the next meeting.
Chip-led momentum continues, and NQ reclaims its pre-FOMC highs into the holiday weekend.
Base case: Today's rally holds through the session as an oil-driven relief bounce, but upside stalls below Wednesday's pre-Fed highs.
Yields stay elevated, the dollar holds its post-FOMC bid, and NQ trades in a choppy range as the market waits for the next inflation data point to validate or invalidate the Fed's hawkish pivot.
Bear case: Hormuz reopening proves messier than headlines suggest — Iran has reneged on similar commitments before during this conflict — and any fresh friction reverses today's oil-driven optimism fast.
Combined with a Fed that's already signaled hikes are back on the table, that's a setup for renewed pressure on rate-sensitive growth names, with thin Friday-adjacent liquidity amplifying any air pocket.