Wall Street stocks were modestly lower yesterday and crude prices extended their climb as Iran flaunted its control over the Strait of Hormuz and investors digested a host of mixed corporate earnings reports.
All three major US stock indexes were modestly lower, with the S&P 500 and the Nasdaq easing back from the latest in a recent spate of record closing highs.
Gold ticked down as the dollar was nominally higher. Iran displayed its grip over the Strait of Hormuz yesterday with a video of its commandos storming a cargo ship following the collapse of peace negotiations and US President Donald Trump’s indefinite extension of the ceasefire.
“Markets are trying to test out how far they can run, before we actually get hard evidence that the resolution, or that Iran is moving towards an actual resolution,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.
“We’ve had this incredible rally on the promise and the directional shift towards peace, but at a certain point you need to see more hard evidence.”
“We’ve gone from things are getting worse and evolving to things are at least getting better, at least there’s talks, and then focus, more broadly, on the fundamentals,” Mayfield added.
On the economic front, new claims for unemployment benefits remained muted, while S&P Global’s advance PMI reading showed business activity is picking up steam this month, although output prices jumped to the highest reading since July 2022, reflecting supply chain complications arising from the Middle East conflict.
Among companies reporting first-quarter results, American Airlines and Honeywell, among others, provided disappointing guidance due to higher costs and other disruptions related to the US-Iran war.
The Dow Jones Industrial Average fell 30.02 points, or 0.06 per cent, to 49,459.03, the S&P 500 fell 2.49 points, or 0.03pc, to 7,135.41 and the Nasdaq Composite fell 72.11 points, or 0.29pc, to 24,586.11.
European shares were nominally higher, reversing earlier weakness as investors weighed developments in the Middle East and a wave of corporate results.
MSCI’s gauge of stocks across the globe fell 1.33 points, or 0.12pc, to 1,069.98.
The pan-European STOXX 600 index rose 0.1pc, while Europe’s broad FTSEurofirst 300 index rose 4.52 points, or 0.18pc.
Emerging market stocks fell 5.99 points, or 0.37pc, to 1,601.08.
MSCI’s broadest index of Asia-Pacific shares outside Japan closed lower by 0.38pc, to 819.56, while Japan’s Nikkei fell 445.63 points, or 0.75pc, to 59,140.23.
Oil prices pared earlier gains, but Brent still hovered north of $100 per barrel amid stalled US-Iran talks and continued traffic restrictions through the Strait of Hormuz.
US crude rose 0.37pc to $93.32 a barrel and Brent rose to $102.76 per barrel, up 0.8pc on the day.
The dollar was essentially flat but headed for weekly gains as US-Iran tensions undermined ceasefire hopes.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.03pc to 98.58, with the euro up 0.05pc at $1.1709.
Against the Japanese yen, the dollar weakened 0.04pc to 159.42. In cryptocurrencies, bitcoin fell 0.59pc to $77,993.77.
Ethereum declined 2.46pc to $2,333.21.
US Treasury yields inched lower in rangebound trading, as ongoing uncertainty surrounding the ceasefire continued to complicate the assessment of risk sentiment in the market.
The yield on benchmark US 10-year notes fell 0.6 basis points to 4.288pc, from 4.294pc late on Wednesday.
The 30-year bond yield fell 1.2 basis points to 4.8897pc from 4.902pc late on Wednesday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, was flat at 3.794pc, from 3.794pc late on Wednesday.
Gold prices reversed earlier gains following news of a possible extension of the Israel-Lebanon truce.
Spot gold fell 0.16pc to $4,730.14 an ounce.
US gold futures were flat to $4,732.40 an ounce.
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