U.S. and Iran Sign MOU: 8 Key Items Shaping the Stock Market Thursday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, futures point to a positive start to the trading day when U.S. equities begin trading later on Thursday morning.

1. The U.S. and Iran have remotely signed their memorandum of understanding to end the war and open the Strait of Hormuz, and the agreement is now in effect, two U.S. officials told Axios. President Trump signed the agreement, one official said, and Trump later confirmed it. The signing was supposed to happen in Switzerland on Friday, but a diplomat from a mediating country and a second source familiar told Axios earlier on Wednesday that there had been discussions about signing and implementing it sooner. (Axios)

This is some welcomed news from the market and helps explain the uplift we are seeing in U.S. equity futures following Wednesday’s post-Fed-meeting selloff. Friday’s meeting in Switzerland between U.S. and Iranian delegations, headed by Vice President Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf, is still expected to take place, with the focus now on the Strait of Hormuz and the 60-day negotiating period over Tehran’s nuclear program.

When it comes to reopening the strait, indications are that many shipping and oil companies “need more clarity,” including on whether the strait is clear of mines and whether they need to seek any kind of permission from Iran before sailing through. There are also questions about whether passage through the strait will be free. Iranian media has said that this might only happen for two months, before Tehran starts charging navigation fees. We’ll want to see if that happens and watch for potential implications given that the U.S., Europe and Gulf Arab states have balked at the idea of Iran charging a toll for what’s widely considered international waters.

2. Short-term U.S. interest-rate futures are now pricing in ‌a bigger chance that the Federal Reserve will deliver a rate hike by ⁠September than opt to keep rates where they are. The shift in market-based rate-path expectations comes after the Fed said it would ‌leave ⁠the policy rate in its current 3.50%-3.75% range at this time, ⁠but a near-majority of policymakers penciled a rate ⁠hike by the end of 2026 ⁠to combat higher inflation. (Reuters)

On Wednesday, we shared our view on the changes we saw in the updated June 2026 Set of Economic Projections and our takeaways from Fed Chair Kevin Warsh’s first policy presser. The penciling in of one rate hike for this year was widely expected, but it was Warsh’s multiple mentions of delivering on the Fed’s mandate for price stability in the face of recent inflation data that pulled the market’s expectation for a rate hike forward to September from December. Following Warsh’s presser, the CME FedWatch Tool has added another hike in Q1 2026, but our view is that data in the coming months will determine that likelihood.

Oil prices have been falling over the last month and are dropping further on Thursday morning in response to the earlier-than-expected preliminary U.S.-Iran peace deal being signed. Per AAA, the U.S. national average gas price has dropped back below $4 a gallon, down more than 50 cents from the $4.5150 average a month ago.

We are not expecting an immediate return to pre-war prices for oil and gas, given time to re-open the strait and bring idled petroleum capacity back online, but the trend of lower petroleum-related prices should continue as we move into 2H 2026. Should we see those inflation pressures ramp down quicker than expected, we should see the same for hawkish language and potential for additional rate hikes with it.

3. Traders have to be on their toes this week as the Juneteenth public holiday shifts the schedule for when options expire, potentially meaning volatility for the stock market. The third Friday of March, June, September, and December are called triple witching days because stock options, stock-index futures, and stock index options all expire on the same day. Triple witching days can lead to higher volume and volatility. However, this Friday is Juneteenth — a day that commemorates the end of slavery in the U.S. — meaning that American stock markets are closed. Instead, Thursday will effectively be the witching day as options expire one day early. (Barron’s)

It’s always prudent to be mindful of potential drivers of market volatility. But here’s the thing: findings from Dow Jones Market Data show that in 2024 and 2025, the S&P 500 and the Nasdaq Composite rose on four witching days and fell on the other four. What did all eight witching days have in common? Elevated trading volumes.

4. Apple plans to raise prices on its products to offset the surging costs of memory and storage chips, Chief Executive Tim Cook said in an exclusive interview with The Wall Street Journal. “Unfortunately, price increases are unavoidable,” he said. “We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable.” (WSJ)

Given the memory supply constraints we’ve been hearing about so far this year, especially for DRAM, our view is that the above comment from Apple (AAPL) was only a matter of time, and we should expect other companies being impacted to make similar announcements. We’ve already seen expectations for year-over-year declines in smartphone, PC and related consumer electronic devices shipments, but depending on where some of these price increases land, additional downward revisions are possible.

We suspect Apple will flex its balance sheet to address the capacity constraint as well as other aspects of its world-renowned supply chain. While Apple may not make any formal announcements, odds are that the form will be like the multi-year ones shared by the likes of Meta (META), Google (GOOGL) and others.

The silver lining is that this bodes not only very well for the Pro Portfolio’s EPS All-Stars position in Micron (MU), but also for the one for Applied Materials (AMAT).

5. Intel Corp.’s stock surged more than 9% in premarket trading Thursday after US President Donald Trump said the chipmaker will work alongside Apple Inc. to design and produce semiconductors domestically. Trump didn’t elaborate on that tie-up, which he mentioned after championing Nvidia Corp. and Elon Musk’s Terafab chipmaking ambitions in a Truth Social post. The iPhone maker has held exploratory discussions about using Intel and Samsung Electronics Co. to produce the main processors for its devices in the US. (Bloomberg)

Our take on this is that while Apple is looking to onshore some of its chip sourcing, it is also contending with the reality of AI and data center capital spending and the demand that is placing on chip manufacturing capacity. And similar to our comment above about memory, Apple isn’t the only company contending with this. Other reports indicate Google, AMD (AMD), Tesla (TSLA), and others are turning to Samsung Electronics (SSNLF) for contract chipmaking services as demand for AI infrastructure strains chipmaking capacity at Taiwan Semiconductor (TSM).

This isn’t the first we’ve heard of this, and our thinking is we are likely to see another step up in capital spending at TSM and elsewhere. That’s another reason for us to remain bullish on AMAT shares.

6. Private equity firm KKR on Wednesday disclosed a $1.4 billion fresh bet on aircraft leasing with partner Altavair, as persistent supply shortfalls at Airbus and Boeing keep plane availability tight. Leasing companies ‌and private equity firms have been playing a bigger role in funding aircraft purchases as airlines face rising costs and recovering travel demand amid limited aircraft supply… KKR plans to source aircraft directly from airlines seeking to free up cash, as well as from manufacturers such as Airbus and Boeing and through secondary market transactions. (Reuters)

The move by KKR (KKR) is a reminder to us that airlines like United Airlines (UAL), Delta (DAL) and American Airlines (AAL) aren’t the only customers for aircraft. The KKR-Altavair tie-up joins companies Sumisho Air Lease, which owns the once publicly traded Air Lease, as a source of new aircraft demand.

The comment about supply shortfalls and plane availability tight speaks to one of the reasons we recently added shares of Boeing (BA) to the Pro Portfolio — rising production levels in the coming quarters and the positive impact on fixed cost absorption, margins, and the company’s bottom line. We’ll continue to look for opportunities to grow this relatively small position size.

7. Economic data today per TipRanks: Initial & Continuing Jobless Claims (Weekly), Philly Fed Index (June), Leading Economic Indicators (May), EIA Natural Gas Inventories (Weekly).

8. Companies reporting today per TipRanks: AM – Accenture (ACN), Kroger (KR).

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At the time of publication, TheStreet Pro Portfolio was long AAPL, AMAT, BA, GOOGL, META and MU.