US Treasury yields and oil prices fell yesterday as hopes increased that the US is nearing a deal with Iran to end the war in the Middle East, while major stock indexes rose ahead of closely watched results from Nvidia.
Investors continued to monitor headlines for signs of progress in US negotiations with Iran to end the war. US President Donald Trump said yesterday that negotiations with Iran were in the final stages, while warning of further attacks unless Iran agrees to a deal.
The US dollar fell from a six-week high, while US crude fell 4.7 per cent to $99.22 a barrel and Brent dropped to $105.76 per barrel, down 4.95pc on the day.
There were also tentative signs of easing pressure from the Gulf yesterday, as two Chinese oil tankers exited the Strait of Hormuz, shipping data showed.
The yield on benchmark US 10-year notes was down 8.2 basis points at 4.588pc, from 4.669pc late on Tuesday. Yields had risen to multi-year highs recently on war-driven inflation fears.
Nasdaq led gains on Wall Street, while consumer discretionary was up the most among S&P 500 sectors.
“There’s renewed positive sentiment because oil prices are down, yields are down,” said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.
But, he said, “there is pessimism on the horizon because higher oil prices for longer put the Fed in a corner.”
Fed funds futures traders are pricing in roughly 50pc odds that the Federal Reserve will raise rates by December – a sharp reversal from before the Iran war began in late February, when markets had expected two cuts this year.
The Dow Jones Industrial Average rose 428.50 points, or 0.87pc, to 49,793.42, the S&P 500 rose 65.46 points, or 0.88pc, to 7,418.45 and the Nasdaq Composite rose 326.83 points, or 1.26pc, to 26,196.48.
MSCI’s gauge of stocks across the globe rose 9.16 points, or 0.84pc, to 1,100.95. The pan-European STOXX 600 index rose 1.65pc.
Longer-dated bonds have also sold off in Europe and Japan, but, as with Treasuries, they found some relief yesterday.
Germany’s 10-year yield, the euro zone benchmark, fell 3 basis points from Tuesday’s 15-year high to 3.16pc.
Benchmark 10-year US Treasury yields reached a 16-month high on Tuesday, while 30-year yields hit their highest level since 2007.
Nvidia was due to report first-quarter earnings after the US market close. Expectations remain high, with revenue forecast to jump nearly 80pc to about $79 billion, according to the median estimate in an LSEG survey of analysts. Nvidia shares were up 1.9pc.
Earlier, Samsung shares fell as much as 4.4pc before closing near flat. Samsung Electronics’ union said it would suspend a strike set to begin today after the two sides reached a tentative pay deal, potentially averting action that threatened to disrupt the production of AI and other chips. Other chip stocks were doing well ahead of the Nvidia results, with an index of semiconductors up about 4pc.
In currency markets, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.21pc to 99.09, with the euro up 0.19pc at $1.1626. Against the Japanese yen, the dollar weakened 0.18pc to 158.76.
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