US Stock Futures Fall as Oil Resumes Advance: Markets Wrap
(Bloomberg) — US stocks fell and Treasury yields rose after attacks on key energy infrastructure in the Middle East drove a renewed advance in oil prices.
Futures for the S&P 500 dropped 0.3% as optimism from the previous session faded. Brent climbed 3.6% toward $104 a barrel after Iran struck energy facilities around the Persian Gulf. Treasuries declined modestly, with the 10-year yield rising one basis point to 4.23%. The dollar was little changed.
The US-Israeli war against Iran continues to reverberate, with traders focused on crude shipments through the Strait of Hormuz. Rising oil prices are fueling inflation concerns ahead of the Federal Reserve and other major central bank meetings, with US diesel topping $5 a gallon for the first time since 2022.
“Our portfolio positioning continues to balance near-term support from higher energy prices against the longer-term risk that sustained inflation and slower growth could weigh on broader risk assets,” said Jeffrey Palma, head of multi-asset solutions at Cohen & Steers Inc. “We expect to take advantage of mispricing opportunities.”
Oil has risen more than 40% since the war started. In the latest developments, operations were suspended at the Shah field in the United Arab Emirates, while an Iraqi oil field and an Emirati port were also targeted by drones and missiles.
US President Donald Trump renewed calls for other nations to help secure the crucial waterway and threatened to expand strikes to Iranian oil infrastructure. He also asked China to delay a summit with Xi Jinping for about a month, saying it was important for him to remain in Washington to oversee the war.
Europe’s Stoxx 600 edged higher to head for its first back-to-back gain since the war began. Government debt in the region strengthened, led by gains in UK gilts. All major European currencies advanced against the dollar.
Asian shares pared much of their earlier gains to rise 0.9%, with Nvidia Corp.’s optimistic comments lifting the region’s technology shares. Gold rose for the first time in five days.
“A meaningful chunk of the risk repricing appears to be in the rearview mirror,” said Mathias Heim, chief investment officer of Bellecapital. “The more interesting question is, increasingly, what could improve from here: de-escalation signals, stabilization in oil flows, or simply the absence of further negative surprises.”
What Bloomberg strategists say…
“Equities are in a lose-lose situation as a result of the surge in oil prices. The potential that the conflict generates a sustained shift higher for yields also signals more pain for stocks.”
— Garfield Reynolds, MLIV Asia Team Leader. Click here for the full analysis.
Corporate Highlights:
Beijing is restricting Chinese companies incorporated overseas from seeking initial public offerings in Hong Kong. BNP Paribas SA expects to attract €350 billion ($400 billion) in net inflows at its asset management business by 2030 following the acquisition of Axa SA’s investment unit. Canadian billionaire Stephen Smith and his family holding company have reached an agreement to acquire a minority stake in the publisher of The Economist magazine, according to the companies. A deal on the future of Thames Water will have to face public scrutiny, as its creditors seek a five-year exemption from regulatory penalties on everything from sewage spills to leakage. Tesla Inc. and LG Energy Solution Ltd. will build a $4.3 billion battery plant in Lansing, Michigan to supply the carmaker’s energy storage systems business. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 was little changed as of 9:16 a.m. London time S&P 500 futures fell 0.3% Nasdaq 100 futures fell 0.4% Futures on the Dow Jones Industrial Average fell 0.3% The MSCI Asia Pacific Index rose 0.3% The MSCI Emerging Markets Index rose 0.7% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1513 The Japanese yen was little changed at 159.14 per dollar The offshore yuan was little changed at 6.8868 per dollar The British pound was little changed at $1.3329 Cryptocurrencies
Bitcoin fell 0.2% to $74,058.7 Ether fell 1.5% to $2,311.45 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.23% Germany’s 10-year yield declined two basis points to 2.93% Britain’s 10-year yield declined four basis points to 4.73% Commodities
Brent crude rose 3.6% to $103.79 a barrel Spot gold rose 0.2% to $5,016.55 an ounce This story was produced with the assistance of Bloomberg Automation.
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