Equities were mixed on Friday and oil prices dipped as investors anxiously awaited U.S.-Iran talks scheduled for the weekend, while U.S. inflation data surged as expected due to the recent jump in energy prices.
U.S. indexes had their best week since November, and a broad Asian stocks index posted its best week in three-plus years after the U.S. and Iran earlier this week agreed to a cease-fire to try to end the near six-week war that has resulted in the worst energy-supply disruption in history.
However, the market ended the week on edge over whether coming talks will bring a lasting cessation to the conflict. Iran reiterated demands for its assets to be unblockedand for an end to Israel’s attacks on Lebanon, while President Donald Trump threatened more strikes if Iran does not agree to its demands.
Oil prices remain elevated, even after slumping dramatically on Wednesday after Trump called off threatened attacks on Iran’s infrastructure. Traffic through the key Strait of Hormuz – used to transit one-fifth of global oil and gas supply – remains at a fraction of pre-war levels, with most of the ships that sailed through the strait in the past day linked to Iran.
Oil futures dipped Friday, with U.S. crude settling down $1.30 to $96.57 a barrel and Brent finishing at $95.20 a barrel, down 72 cents.
On Wall Street, the Dow Jones Industrial Average .DJI fell 0.6% to 47,916.57, the S&P 500 fell 0.1% to 6,816.89 and the Nasdaq Composite rose 0.4% to 22,902.89.
For the week, the S&P 500 rose 3.6%, the Dow gained 3% and the Nasdaq rose 4.7% with all three logging their biggest weekly percent gains since November.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.9% to put it up 7.3% for the week, its biggest advance since November 2022.
SATURDAY TALKS AS INFLATION RISES
Tehran and Washington delegations are due to meet for peace talks on Saturday. Iran’s Parliament Speaker Mohammad Baqer Qalibaf arrived in Islamabad on Friday, according to Iranian media.
Israel said on Thursday that it was seeking talks with Lebanon as Iran has cited Israel’s continuing attacks on Lebanon as a key sticking point in its ceasefire agreement with the United States.
The war’s effect on prices is already being felt. U.S. consumer prices increased by the most in nearly four years in March, while China’s factory-gate prices rose for the first time in 3-1/2 years in March, official data showed earlier.
On top of uncertainties about the Middle East war, Peter Tuz, president of Chase Investment Counsel said that investors are also anxious about the start of first-quarter earnings season next week.
“Since the war began you’ve seen extra pressure on Fridays because of uncertainty about what might happen on the weekend,” said Tuz. He said earnings guidance from executives has contained “more uncertainty than usual.”
However, Tuz said results from Taiwan’s TSMC 2330.TW were encouraging, as the world’s largest contract chip manufacturer reported a 35% surge in first-quarter revenue, exceeding forecasts, thanks to artificial intelligence-related demand.
The report lent support to the tech shares. The Philadelphia semiconductor index rose 2.3%.
MSCI’s gauge of stocks across the globe rose 2.01 points to 1,034.64. The pan-European STOXX index closed up 0.4%.
The dollar USD, which measures the greenback against a basket of currencies, fell 0.2% to 98.68, closing out its biggest decline since January. The euro rose 0.25% to $1.1728. The dollar gained 0.2% against the Japanese yen to 159.3.
U.S. Treasury yields edged slightly higher. The yield on benchmark U.S. 10-year notesrose 2.4 basis points to 4.317% while the 30-year bond yield rose 1.1 basis points to 4.909%.
The two-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.9 basis points to3.802%.
In precious metals, spot gold fell 0.3% to $4,747.88 an ounce while spot silver rose 1.4% to $76.10 an ounce.
(REUTERS)
