US pre-open: Stocks seen up amid US-Iran peace hopes; Estee Lauder surges

(Sharecast News) - US stocks looked set to rise at the open on Friday amid renewed hopes of a peace deal between the US and Iran.

At 1115 BST, Dow Jones Industrial Average futures and S&P 500 futures were up 0.2%, while Nasdaq futures were 0.3% higher. Brent crude was up 2.7% at $105.35 a barrel.

Neil Wilson, UK investor strategist at Saxo Markets, said: "Traders are hopeful of a deal between the US and Iran. Although Iran's Supreme Leader reportedly resisted demands to remove enriched uranium from the country, Tehran has said the latest proposal from Washington had helped narrow differences between the two sides, whilst President Trump said he'd be prepared to wait 'a couple of days' for a response.

"It follows suggestions on Wednesday that the two sides were in the 'final stages' of agreeing terms. There is a sense things are moving in the right direction still for markets - slowly, unevenly, but still in the right direction. That's cut off the extreme left tail risk for the market but oil remains the key here and is still trading above $100 because of acute physical tightness.

"And oil prices hold the key to the bond market, where yields have eased a bit in the last couple of days as crude retreated - Brent down from a high above $111 on Wednesday to $102 at the lows yesterday reflects optimism, but it's up a bit this morning again to $105 where it's regained the key 50-day moving average.

"Meanwhile earnings remain the driver underneath - long-term earnings growth consensus expectations for the S&P 500 rose to 21.9% this week - the highest on record except for the pandemic, per Yardeni. US economic growth remains robust and inflation is picking up. The only thing that can stop this market are bond yields, though I would expect some mainly flow driven pullback over the early summer."

On the corporate front, Estee Lauder looked set to jump at the open after it announced late on Thursday that talks with Spanish fashion and beauty company Puig about a potential merger had ended. Estee Lauder shares were up 9% in pre-market trade.

Dan Coatsworth, head of markets at AJ Bell, said talks had collapsed "following speculation around a power struggle". He said Estee Lauder's shareholders were "ecstatic" and that the surge in the share price was "investors' way of saying they've had a lucky escape".

"Estee Lauder and Puig weren't the most obvious companies to park together. One is focused on skincare, makeup and haircare while the other specialises in designer clothing. They meet in the middle on fragrances and perfumes. Putting everything under one roof felt a bit like a jumble sale rather than a match made in heaven," he said.

Elsewhere, Workday shares surged in pre-market trade after the enterprise software maker posted better-than-expected first-quarter results and lifted its full-year margin outlook.

Take-Two Interactive Software was also in the black after results.

On the macro calendar, investors will turn their attention to the Michigan consumer sentiment index at 1500 BST.