Stocks Fall as Hormuz Deadlock Lifts Oil, Yields: Markets Wrap
(Bloomberg) — A rebound in US equities faded while oil and bond yields rose as traders waited to see whether hopes of a peace deal in the Middle East would translate into tangible progress.
S&P 500 futures fell 0.4% after Nvidia Corp.’s earnings failed to ignite further strong gains in the artificial intelligence trade. Brent climbed 2.2% to above $107 a barrel. Iran’s Supreme Leader said the country’s must keep its uranium, Reuters reported, tempering optimism that the warring sides were moving closer toward a deal to reopen the Strait of Hormuz.
Treasuries fell across the curve after a sharp comeback in the previous session, with JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon warning that interest rates may climb much further from current levels. Long-dated bond yields around the world have tested multiyear highs in recent days on concern about an oil-driven spike in inflation and amid worries over government spending.
The muted tone in US markets contrasted with buoyant optimism in Asia, where a key tech gauge jumped the most in six weeks.
LG Electronics Inc. and Hyundai Mobis Co. both surged in Seoul after Nvidia CEO Jensen Huang touted new opportunities in robots and automated vehicles. SoftBank Group Corp. jumped 20% as two companies backed by the Japanese investor — OpenAI and SB Energy Corp. — were said to be preparing for initial public offerings. Regional chipmakers tracked Wednesday’s gains in US peers.
“The rally in Asia has been supported by very strong momentum in technology, particularly around the current reality of AI demand,” said Francisco Simón, European head of strategy at Santander Asset Management. “Looking ahead, investors also continue to see structural growth potential linked to the future evolution of AI, including companies that may emerge as leaders.”
Nvidia shares were little changed in US premarket trading. Intuit Inc. sank 13% after the software company said it plans to reduce its workforce by about 17%. The shares of space exploration and satellite internet companies were broadly steady after Elon Musk’s SpaceX publicly filed for an initial public offering. Tesla Inc. advanced 0.8%.
Investors are also getting a reading on business activity in major economies against a backdrop of rising energy costs. The data compiled by S&P Global are closely watched as they arrive early in the month and are good at revealing trends and turning points.
In the UK, businesses posted the first decline in output in over a year as the Iran shock and a mounting rebellion against Prime Minister Keir Starmer hit activity in the services sector. In the euro area, activity shrank at the quickest pace in 2 1/2 years.
Corporate Highlights:
AvalonBay Communities Inc. and Equity Residential agreed to merge in an all-stock transaction that combines two of the biggest apartment real estate investment trusts. SpaceX filed publicly for what stands to be the largest-ever initial public offering, revealing billions in losses and the super-voting share plan allowing Elon Musk to keep the company under his control. OpenAI is preparing to file for an initial public offering in the coming weeks and is targeting a public debut sometime in the fall, according to a person familiar with the plan. Samsung Electronics Co. could distribute about 40 trillion won ($26.6 billion) to chip employees as a bonus for this year after the company struck a last-minute deal with labor unions to avert a strike. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the Wall Street giant will likely hire more artificial intelligence specialists and fewer traditional bankers as the adoption of the technology accelerates. Intuit Inc. is cutting about 17% of its staff, or about 3,000 workers, a move to trim costs while the financial software company invests in artificial-intelligence products. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.4% as of 6:54 a.m. New York time Nasdaq 100 futures fell 0.5% Futures on the Dow Jones Industrial Average fell 0.3% The Stoxx Europe 600 fell 0.4% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1605 The British pound was little changed at $1.3422 The Japanese yen fell 0.1% to 159.13 per dollar Cryptocurrencies
Bitcoin fell 0.7% to $77,144.51 Ether fell 1.1% to $2,111.02 Bonds
The yield on 10-year Treasuries advanced three basis points to 4.62% Germany’s 10-year yield advanced two basis points to 3.12% Britain’s 10-year yield was little changed at 4.99% Commodities
West Texas Intermediate crude rose 2.8% to $101.03 a barrel Spot gold fell 0.7% to $4,514.27 an ounce This story was produced with the assistance of Bloomberg Automation.
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