WALL Street stocks were mixed and European shares were lower yesterday as investors monitored the fragile US-Iran truce and weighed solid corporate earnings against downbeat forward guidance due to the war-related energy price shock.
Tech shares, buoyed by strong results from Intel, helped put the Nasdaq on top, while the S&P 500 was more modestly green. The Dow was in negative territory.
For the week, the S&P 500 and the Nasdaq appeared set to log nominal gains, while the blue-chip Dow was poised to register a decline from last Friday’s close. Even so, the S&P 500 and the Nasdaq continued to hover near record highs.
“What’s been dominating for the last two weeks is earnings,” said Jay Hatfield, CEO of Infrastructure Capital Management in New York. “And then after that, the resolution of the war.”
“Yesterday the market tried to sell off because of war headlines and then it rallied back,” Hatfield said. “Today, there is positive news that the foreign minister is in Pakistan, and the market’s not even up on that.”
Oil prices were volatile as supply concerns offset optimism over potential US-Iran peace talks.
US crude fell 1.12 pr cent to $94.78 a barrel and Brent fell to $104.70 per barrel, down 0.36pc on the day.
First-quarter reporting season has hit full stride, with 139 of the companies in the S&P 500 having reported. Of those, 81pc have beaten earnings estimates. Analysts now see aggregate year-on-year S&P 500 earnings growth of 16.1pc, up from the 14.4pc growth projected at the beginning of the quarter, according to LSEG I/B/E/S.
But on analyst conference calls, CEOs are increasingly providing downbeat guidance due to spiking fuel costs resulting from the war on Iran. Consumer products company Procter & Gamble warned on its Friday earnings call that it expects a roughly $1 billion hit to its fiscal 2027 profit because of the war-related energy price shock.
Next week, a spate of high-profile earnings is on the docket, including tech and tech-adjacent megacaps Amazon , Alphabet, and Meta Platforms. Oil supermajors Exxon Mobil and Chevron are slated to report next Friday.
The Dow Jones Industrial Average fell 151.44 points, or 0.31pc, to 49,157.80, the S&P 500 rose 22.81 points, or 0.32pc, to 7,131.21 and the Nasdaq Composite rose 197.27 points, or 0.81pc, to 24,635.41.
European shares dropped yesterday and were on course to notch their first weekly loss in five as investors fretted about an inflation shock arising from disrupted energy supplies due to Middle East turmoil.
MSCI’s gauge of stocks across the globe rose 2.05 points, or 0.19pc, to 1,069.36.
The pan-European STOXX 600 index fell 0.49pc, while Europe’s broad FTSEurofirst 300 index fell 10.77 points, or 0.44pc.
Emerging market stocks rose 12.17 points, or 0.76pc, to 1,611.48. MSCI’s broadest index of Asia-Pacific shares outside Japan closed higher by 0.77pc, to 825.44, while Japan’s Nikkei rose 575.95 points, or 0.97pc, to 59,716.18.
In cryptocurrencies, bitcoin gained 0.09pc to $77,994.26. Ethereum declined 0.47pc to $2,315.37.
The yield on benchmark US 10-year notes fell 1.7 basis points to 4.306pc, from 4.323pc late on Thursday.
The 30-year bond yield fell 1 basis point to 4.9081pc from 4.918pc late on Thursday.
The two-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 4.3 basis points to 3.783pc, from 3.825pc late on Thursday.
Gold advanced but remained on track for a weekly loss as inflation worries persisted amid the Middle East turmoil. Spot gold rose 0.81pc to $4,730.84 an ounce. US gold futures rose 0.03pc to $4,706.70 an ounce.
Meanwhile, stock markets in the UAE closed higher yesterday, with Dubai leading regional gains after stronger-than-expected earnings from the country’s three largest lenders lifted banking shares and supported broader sentiment, even as investors remained cautious amid the Iran war.
Dubai’s main index gained 0.7pc, snapping two sessions’ losses with top lender Emirates NBD Bank increasing 2pc, while state-run utility firm Dubai Electricity and Water Authority advanced.
Emirates NBD said on Thursday its profit for the first quarter rose 3pc to 6.4bn dirhams ($1.74bn).
The Dubai index logged a 2.2pc decline, its first weekly loss after five positive sessions, while Abu Dhabi recorded a 1.3pc weekly fall, according to data compiled by LSEG.
Abu Dhabi Commercial Bank recorded a 37pc hike in first quarter net profit to 3.36 billion dirhams, while Q1 operating income jumped 18pc year-on-year.
The banking sector’s performance reinforced confidence in the underlying strength of the domestic economy, encouraging selective buying and providing broader support to UAE equities, said George Pavel, general manager at Naga.com Middle East.
“However, sentiment could remain cautious amid persistent geopolitical risks in the region”.
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