Stocks Climb as Oil Retreats on US-Iran Deal Hopes: Markets Wrap
(Bloomberg) — Hopes for a diplomatic breakthrough in the Iran war drove oil prices lower, fueling a rebound in stocks and easing the Treasury volatility that has roiled financial markets around the world.
Brent crude settled around $104 as the New York Times reported Iran has proposed a plan to end the conflict. Under the offer, the Strait of Hormuz would reopen and nuclear talks would be revived. Separately, President Donald Trump said he discussed the war in Iran with his Chinese counterpart Xi Jinping, adding “I think we’re going to do great,” without elaborating.
The S&P 500 rose 0.5%. A gauge of chipmakers saw its longest weekly advance since May. Short-dated bonds outperformed. While 30-year yields remained at a two-decade high, they edged only mildly up. The yen climbed as US Treasury Secretary Scott Bessent said he discussed “the desirability” of a strong currency with Japanese Finance Minister Satsuki Katayama.
Fluctuations in oil prices are likely to remain a key driver for markets at a time when elevated energy costs are stoking inflationary pressures and underpinning the outlook for further rate increases. Money markets reflect three Federal Reserve hikes over the next year, which could hold back risk appetite and keep yields high for some time.
“Ultimately, investors are swimming in three major cross currents: Solid demand and robust corporate profits, geopolitical risk and monetary policy uncertainty,” said Kyle Rodda at Capital.com. “Corporate profitability is providing the floor supporting the market while geopolitical and policy uncertainty are creating a ceiling.”
Fed Bank of Cleveland President Beth Hammack said long-term Treasury yields are being driven higher by a stronger growth outlook, concerns about government debt and expectations for additional rate increases from the US central bank.
“I think there are a number of things at play. One is I think that the growth numbers have come in in pretty solid way, and I think that it’s expectations of continued performance,” Hammack said Friday.
While recent comments from Fed officials have been hawkish, policy tightening is likely to be less aggressive than current market pricing suggests, according to Ulrike Hoffmann-Burchardi at UBS Chief Investment Office. Her base case is for the Fed to raise rates in December before keeping them steady.
“Resilient growth and robust earnings should help markets withstand a measured tightening cycle, while higher bond yields provide opportunities to add portfolio income,” she said. “We continue to recommend positioning for further equity gains while diversifying and managing concentration risk.”
On the economic front, data showed US consumer sentiment fell in September to a four-month low amid deepening worries about rising prices and the outlook for the economy. Meantime, orders for business equipment increased in August by more than projected.
Corporate Highlights:
Microsoft Corp. co-founder Bill Gates warned that AI is a “powerful enough” tool to kill off a substantial portion of humanity, joining a growing chorus of tech leaders and employees calling attention to existential risks. Microsoft is merging the consumer and workplace versions of its Copilot AI assistant into one product aimed at corporate customers, ceding the crowded market for personal chatbots to OpenAI, Alphabet Inc.’s Google and, now, Meta Platforms Inc. Anthropic PBC has signed an $11.6 billion, seven-year contract with Akamai Technologies Inc. for computing power, adding to the AI developer’s growing list of data center deals. Costco Wholesale Corp.’s quarterly profits surpassed Wall Street’s estimates after the company recorded a benefit related to tariff refunds. MGM Resorts International is discussing making a bid to purchase Barry Diller’s People Inc., which owns a roughly 27% stake in MGM, the Wall Street Journal reported, citing people familiar with the matter. Health and fitness ring-maker Oura Inc.’s initial public offering raising as much as $2.2 billion has drawn about four times as many orders as there are shares available, according to people familiar with the matter. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.5% as of 4 p.m. New York time The Nasdaq 100 rose 0.4% The Dow Jones Industrial Average rose 0.9% The MSCI World Index rose 0.6% Currencies
The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.1% to $1.1394 The British pound rose 0.2% to $1.3247 The Japanese yen rose 1% to 157.27 per dollar Cryptocurrencies
Bitcoin fell 0.4% to $83,996.67 Ether rose 0.2% to $2,691.77 Bonds
The yield on 10-year Treasuries declined four basis points to 5.16% Germany’s 10-year yield was little changed at 3.60% Britain’s 10-year yield declined two basis points to 5.37% The yield on 2-year Treasuries declined seven basis points to 4.86% The yield on 30-year Treasuries advanced one basis point to 5.49% Commodities
West Texas Intermediate crude fell 2% to $92.69 a barrel Spot gold rose 0.4% to $4,290.10 an ounce ©2026 Bloomberg L.P.
