Stocks Reverse Losses, Oil Prices Surge: Markets Wrap
(Bloomberg) — Stocks reversed sharp declines to close higher, as investors monitored fresh developments around the Strait of Hormuz and the war in the Middle East. Oil prices held onto hefty gains.
The S&P 500 Index closed up 0.1% after tumbling earlier in the session. The Nasdaq 100 ended 0.1% higher, also rebounding from a deep loss. West Texas Intermediate was up 12% at around $112 per barrel.
Iran is drafting a protocol with Oman to monitor traffic through the Strait of Hormuz, having effectively shut it down since the start of the war, state-run IRNA reported. That would require shippers to pay tolls to the Islamic Republic, Iran Deputy Foreign Minister Kazem Gharibabadi said in an interview with Sputnik.
The passage is officially international waters and any attempt by Iran to assert control over traffic would be opposed by Western powers and Gulf Arab states.
“Equity markets seem to be looking past the risk of a higher embedded premium in oil and more focused on the Strait reopening,” said Adam Turnquist, chief technical strategist for LPL Financial. “With oil clearly in the driver’s seat of risk appetite, sustainability of the recovery in equity markets appears vulnerable.”
Stocks started off the session deep in the red after a Wednesday speech from President Donald Trump did little to reassure investors that the war in the Middle East was nearing a swift resolution, though he has previously set a two-to-three-week timeline for ending the conflict. On Thursday, Trump issued fresh threats on Iranian infrastructure in a bid to pressure Tehran in negotiations.
“The upshot is that markets remain uncertain as to how long the acute disruptions we are seeing to global energy supplies will persist,” wrote James McCann, senior economist, Edward Jones. “Against this backdrop, sentiment will likely remain headline-driven in coming sessions, with volatility likely to remain elevated over the short term at least.”
The two-year Treasury yield was little changed at 3.80%.
Shares of top asset managers slid after Blue Owl Capital Inc. said it will limit redemptions from two of its private credit funds after facing a surge in withdrawal requests.
War Pattern
The higher close for the S&P 500 runs counter to a pattern of late-week selloffs that have hit the market ever since the war began, as nervous investors unwind positions that could be upended if weekend developments threaten to worsen the hit to the global economy.
“While assets gyrate on every new headline, until a clear agreement is achieved with a palatable plan for reopening the Strait, there’ll be downward pressure on economic growth and upward pressure on headline inflation,” said Max Gokhman, deputy CIO, Franklin Templeton Investment Solutions. “That spells indigestion for both equity and bond investors.”
Tesla Inc. shares fell after the company posted one of its worst sales quarters in years, missing Wall Street’s expectations, as it struggles to turn around its core business and navigate an increasingly challenged electric-vehicle market.
Ahead of Friday’s March payrolls report, jobs data on Thursday gave mixed signals on the labor market. A report from Challenger, Gray & Christmas Inc. showed a 25% increase in job-cut announcements in March from the previous month. Meanwhile, initial jobless claims unexpectedly fell in the week through March 28.
Corporate News:
A group of private credit firms led by Blackstone Inc. has refused to extend another lifeline to software company Medallia, amping up pressure on owner Thoma Bravo to inject more equity into the troubled business or hand over the keys via a debt restructuring. Stellantis NV is discussing options for building electric vehicles in Canada with its Chinese partner, Zhejiang Leapmotor Technology Co., according to people familiar with the matter. Alibaba Group Holding Ltd. has released its third proprietary AI model in as many days, reinforcing the company’s intent to focus on profiting off its flagship artificial intelligence services. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.1% as of 4 p.m. New York time The Nasdaq 100 rose 0.1% The Dow Jones Industrial Average fell 0.1% The MSCI World Index fell 0.2% Currencies
The Bloomberg Dollar Spot Index rose 0.3% The euro fell 0.5% to $1.1533 The British pound fell 0.6% to $1.3222 The Japanese yen fell 0.5% to 159.68 per dollar Cryptocurrencies
Bitcoin fell 1.8% to $66,924.45 Ether fell 3.7% to $2,064.25 Bonds
The yield on 10-year Treasuries declined one basis point to 4.30% Germany’s 10-year yield was little changed at 2.99% Britain’s 10-year yield was little changed at 4.83% Commodities
West Texas Intermediate crude rose 11% to $111.37 a barrel Spot gold fell 1.8% to $4,673.45 an ounce This story was produced with the assistance of Bloomberg Automation.
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