WORLD stocks rose yesterday after robust earnings and renewed enthusiasm for technology shares pushed Wall Street to record highs the previous day, while hopes for progress on opening the Strait of Hormuz pressured bond yields.
Wall Street looked to open slightly higher. Nasdaq futures rose 0.2 per cent, while S&P 500 futures added 0.5pc after the benchmark index hit all-time highs on Tuesday.
European shares inched up as investors awaited signs of progress in the US-Iran negotiations.
The pan-European STOXX 600 index was last up 0.3pc.
US President Donald Trump said his administration had “very good discussions” with Iran during all-day negotiations, fuelling hopes the five-month conflict could be nearing an end.
Drugmaker Novo Nordisk, one of Europe’s biggest companies by market value, was down 4.2pc after disappointing sales of its Wegovy weight-loss pill overshadowed a strong second-quarter earnings beat.
HSBC shares fell nearly 3pc a day after its results as investors digested analysts’ reaction to the figures.
Fresh evidence of heavy spending on AI infrastructure helped lift Japan’s Nikkei 3.7pc to its highest since July 23, while South Korea’s market continued its volatile run, closing 3.8pc higher.
MSCI’s broadest index of world shares rose 0.4pc.
Despite the upbeat mood, chipmaker AMD fell 7pc in premarket trading after dropping 8.8pc in after-hours deals, as results that beat analysts’ estimates failed to meet investors’ lofty expectations.
AI and satellite company SpaceX was down 10pc in premarket trading on worries heavy capital spending was eating up all its cash flow.
That has been a recurring concern for all AI stocks given the vast cost of compute power, with borrowing costs for the sector continuing to rise.
“SpaceX continues to execute strongly operationally, but its ambitious investment programme means additional capital will almost certainly be required over the medium to longer term,” said Chris Weston, head of research at broker Pepperstone.
Brent crude rose more than $1, or 1.26pc, to $80.34 a barrel, a long way from its July peak of $102, while US crude was up 14 cents to $76.24, after reports of attacks on a Saudi Arabian vessel in the Red Sea.
Sentiment was supported by Qatar saying mediators were making progress in efforts to end the US-Iran war, though details were lacking.
John Oh, an energy economist at CBA, said flows in the Strait of Hormuz were proving more resilient than first thought, perhaps reaching 40pc to 45pc of pre-war levels last week, based on ship tracking numbers.
“We estimate that traffic flows only need to return to 50pc to 60pc of pre-war levels to assert oversupply conditions in global oil markets,” he wrote in a note, adding that helped to explain why Brent oil futures had dipped into the $70s.
That backdrop provided some relief from inflation fears and boosted bonds globally, with 10-year Treasury yields now at 4.627pc, down from last week’s high of 4.747pc.
The next round of US economic data, including tomorrow’s jobs report and next week’s inflation readings, will be closely watched by the Federal Reserve, said James Rossiter, head of global economics at TD Securities.
If the Fed shifted from holding rates steady to a tightening cycle, “markets would respond vigorously”, Rossiter said.
Markets also lowered the probability of a September Fed rate hike to 57pc from 67pc.
Fed Bank of Kansas City President Jeff Schmid used a speech on Tuesday to call for tighter policy to help bring inflation back to the central bank’s 2pc target.
In commodity markets, the drop in yields helped non-interest-paying gold up 2.7pc to $4,185 an ounce.
Meanwhile, Gulf stock markets closed higher yesterday as investors looked for progress towards ending the Iran war, which could help ease fears of oil-fuelled inflation.
Saudi Arabia’s benchmark index added 0.3pc, led by a 1.1pc rise in Al Rajhi Bank. However, oil major Saudi Aramco dropped 0.6pc.
Among other losers, Power and Water Utility Co for Jubail and Yanbu plunged a record 10pc, hitting the exchange’s daily lower limit after swinging to second-quarter losses.
Elsewhere, Saudi real estate developer Retal Urban Development Co fell 7.8pc after posting a second-quarter loss. Dubai’s main share index gained 0.4pc, led by a 1.4pc rise in blue-chip developer Emaar Properties.
In Abu Dhabi, the index was up 0.1pc.
The Qatari index gained 0.9pc, with most of its constituents in positive territory including the Gulf’s biggest lender, Qatar National Bank, which was up 1.2pc.
Outside the Gulf, Egypt’s blue-chip index finished 0.3pc higher. Egypt’s net foreign reserves rose to $56.294bn in July from $55.072bn in June, the central bank said yesterday.
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