Stocks, Oil Whipsaw With Iran Deadline in Focus: Markets Wrap
(Bloomberg) — Stocks and crude oil whipsawed amid uncertainty ahead of President Donald Trump’s latest Iran deadline, with tentative ceasefire signals tempered by the risk of further escalation.
Brent crude rose 1.4% to over $111 a barrel in volatile trading, while futures contracts for the S&P 500 Index slipped 0.6% as traders stayed cautious before Trump’s Tuesday 8 p.m. Eastern Time cutoff. The Bloomberg Dollar Spot Index edged up 0.1%, while Treasury 10-year yields rose one basis point to 4.34%.
Asian shares pared earlier gains to advance 0.3%.
Traders are largely staying on the sidelines ahead of Trump’s deadline as uncertainty over escalation risks, oil supply disruptions and policy responses limits conviction despite tentative ceasefire signals. Attention remains firmly on the Strait of Hormuz — a key artery for Middle East oil flows — with the US president insisting any deal must ensure uninterrupted transit through the waterway.
“Market participants will remain highly sensitive to further developments out of the Middle East, which continue to act as the primary driver of sentiment,” Nick Twidale, chief market analyst at AT Global Markets, wrote in a note. “All eyes will be on news wires as the day progresses, but the skew seems to be to the downside at the moment.”
Trump said talks with Iran are “going well” ahead of the deadline to agree to a deal, even as he insisted that freedom of navigation through the Strait of Hormuz must be part of any accord. If Iran doesn’t agree to the US’s terms, the military may destroy “every bridge in Iran by 12 o’clock tomorrow night” and put every power plant “out of business,” Trump warned Monday.
Iran reportedly passed to mediator Pakistan a rejection of a ceasefire proposal. It demanded a permanent end to the war, lifting of sanctions, and reconstruction efforts, in addition to protocol for safe passage through Hormuz, according to the state-run Islamic Republic News Agency.
“It’s clearly too early for market watchers to stop thinking about geopolitical risk,” said Jeff Buchbinder at LPL Financial. “For now, we believe the best course of action for investors is to be patient.”
What Bloomberg’s Strategists Say…
“Crude oil futures may have peaked in the short term. President Trump’s repeated deadline extensions in the past also mean investors are leaning toward de-escalation as a likelier path forward, which will aid equities. With the physical supply shocks yet to fully hit home, risk sentiment has what may be a brief chance to flower.”
—Garfield Reynolds, MLIV Asia Team Leader. Click here for the full analysis.
While traders kept a close eye on geopolitical developments, they awaited this week’s key inflation readings. Data published Monday showed the US service economy expanded in March at a slower pace as employment shrank by the most since 2023 and input prices accelerated.
While investors have been fixated on geopolitical risks, the macro data continues to point to a resilient economy and a still-constructive earnings outlook, according to Mark Hackett at Nationwide.
Systematic investors are poised to flip back into equity-buying mode after slashing their exposure to multi-year lows during the recent market selloff, according to Goldman Sachs Group Inc.’s trading desk.
“We believe the S&P 500 is carving out a low and think it makes sense to start adding length in cyclical and quality growth trades where earnings remain strong, valuation has compressed, and sentiment is negative,” said Michael Wilson at Morgan Stanley.
Corporate Highlights:
A Goldman Sachs Group Inc. private credit fund said investors sought to pull just under 5% of their cash in the first quarter, narrowly escaping a broader exodus that has forced peers to cap withdrawals. AMC Entertainment Holdings Inc. saw a surge in ticket sales and concessions over the long Easter weekend, buoyed by The Super Mario Galaxy Movie. Neurocrine Biosciences Inc. agreed to buy Soleno Therapeutics Inc. for $2.9 billion to gain access to a drug for a rare disorder that causes patients to have insatiable appetites. Madison Air Solutions Corp. is seeking to raise as much as $2.23 billion in its initial public offering, in what would be the biggest US listing of an industrial company in close to three decades. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.6% as of 10:56 a.m. Tokyo time Japan’s Topix was little changed Australia’s S&P/ASX 200 rose 1.4% The Shanghai Composite rose 0.4% Euro Stoxx 50 futures rose 0.1% Currencies
The Bloomberg Dollar Spot Index rose 0.1% The euro fell 0.1% to $1.1528 The Japanese yen fell 0.2% to 159.92 per dollar The offshore yuan fell 0.1% to 6.8828 per dollar Cryptocurrencies
Bitcoin fell 2% to $68,407.2 Ether fell 2.4% to $2,098.12 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.35% Japan’s 10-year yield was unchanged at 2.425% Australia’s 10-year yield declined five basis points to 4.99% Commodities
West Texas Intermediate crude rose 2.4% to $115.16 a barrel Spot gold fell 0.7% to $4,617.21 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson.
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