Stocks and Oil Fluctuate Before Iran Deadline: Markets Wrap
(Bloomberg) — Stocks edged higher and oil traded little changed in the countdown to US President Donald Trump’s Tuesday evening deadline for Iran to agree to a ceasefire or face escalation.
Contracts on the S&P 500 edged up 0.1%. Europe’s Stoxx 600 advanced 0.7% as Universal Music Group NV surged as much as 24% after Pershing Square offered to buy the entertainment company. Brent crude erased gains, trading around $109 a barrel. A gauge of dollar strength was 0.1% lower.
Investors are watching for any sign of a breakthrough amid a flurry of diplomacy before the 8 p.m. Eastern Time deadline. The US president insists any deal must ensure uninterrupted transit through the Strait of Hormuz — a key artery for Middle East oil flows. He’s threatened to destroy Iran’s bridges and power plants if no accord is reached.
“It’s not clear that there’s any obvious catalyst for the change in market sentiment,” said Emma Moriarty, portfolio manager at CG Asset Management Ltd. “As we get closer to Trump’s deadline, with no evidence of an agreement, it’s quite possible that markets assume a TACO scenario — that the deadline is, once again, extended.”
US Treasury 10-year yields were flat at 4.32%. Gold climbed 0.6% to around $4,675 an ounce.
Trump’s deadline marks the latest pivotal moment in the war, which has killed thousands of people and triggered the largest-ever disruption to the global oil market. Iran launched seven ballistic missiles and several more drones at Saudi Arabia overnight into Tuesday, while the Israel Defense Forces reported two missile volleys from Iran since midnight.
The growing stress in the oil market is showing up in huge premiums for prompt real-world barrels. Ahead of the Easter weekend, Dated Brent surged above $140 a barrel to the highest since 2008.
What Bloomberg’s Strategists Say:
“Markets have grown accustomed to the president extending such Iran deadlines to allow more space for talks and today may bring more of the same. While markets may find some comfort in Trump pivoting towards trying to get the Strait of Hormuz open, the tail risk of a material escalation between the US and Iran will likely see traders maintain a cautious tone.”
— Adam Linton, macro strategist. For the full analysis, click here.
Traders are also keeping a close watch on key inflation readings due later this week after data Friday showed a strong March payrolls print and lower unemployment rate.
The recent economic numbers aren’t boosting the case for the Federal Reserve to resume cutting rates anytime soon. March CPI on Friday is predicted to show the largest month-over-month increase in headline inflation since June 2022, largely driven by a spike in gasoline prices tied to the Iran conflict.
Corporate Highlights:
ASML shares fell as much as 4.7% on Tuesday after US lawmakers unveiled legislation aimed at tightening restrictions on chip tool exports to China. Universal Music Group shares rose as much as 24% in Amsterdam, but trade well below the value of an offer from Pershing Square Capital Management amid doubt over whether the deal will happen. Broadcom shares rose as much as 2.6% in premarket trading on Tuesday after the chipmaker announced a long-term agreement with Google to develop and supply Tensor Processing Units. Managed care companies gained in the premarket after the Centers for Medicare & Medicaid Services finalized a 2.48% rate hike for health insurers in 2027. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.1% as of 6:15 a.m. New York time Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average rose 0.2% The Stoxx Europe 600 rose 0.6% The MSCI World Index rose 0.2% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.2% to $1.1561 The British pound rose 0.2% to $1.3261 The Japanese yen was little changed at 159.66 per dollar Cryptocurrencies
Bitcoin fell 1.3% to $68,934.51 Ether fell 1.4% to $2,118.09 Bonds
The yield on 10-year Treasuries was little changed at 4.32% Germany’s 10-year yield advanced one basis point to 3.01% Britain’s 10-year yield was little changed at 4.83% Commodities
West Texas Intermediate crude was little changed Spot gold rose 0.6% to $4,678.28 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Ruth Carson, Carmeli Argana, Momoka Yokoyama, Neil Campling and Anand Krishnamoorthy.
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