Stocks Get Some Relief as Brent Slips Below $100: Markets Wrap

(Bloomberg) — US stocks are finding some respite after posting their biggest drop this month as Brent crude eased below $100 a barrel and bond yields halted their ascent.

S&P 500 futures rose 0.2%, with the index still on track for its first back-to-back weekly loss since the early stages of the war in the Middle East. Technology stocks remained under pressure as South Korea’s memory giants were pummeled. Treasury yields hovered just below their highest levels this year, while Brent fell more than 3% toward $97 a barrel.

Traders are moving cautiously after a week in which stocks and bonds were rattled by the intensifying war in Iran and fresh concerns over whether massive investments in artificial intelligence will pay off. Investors are now bracing for a weekend that could bring further escalation in the Middle East, ahead of a stack of earnings from AI hyperscalers next week.

Michael Hewson, senior market analyst at iForex, said he was surprised by how well markets were holding up despite the sharp increase in oil prices.

As for earnings, “next week is a really big week and it could be make-or-break in terms of where markets go next,” he said. “There’s an awful lot more nervousness now about capex, particularly when you’re talking about AI and where’s the return on investment coming.”

In Europe, the Stoxx 600 climbed 0.5%, led by gains in software stocks after SAP SE reported better-than-expected sales for cloud products. Bonds across the region staged a rebound after days of losses.

Sentiment got a boost from a bigger-than-expected improvement in private-sector activity in the euro area and UK in July, data compiled by S&P Global showed. Still, escalating tensions in the Middle East threaten to scupper the optimism once again.

“Were it not for the resurgence of the conflict in the Middle East, the picture would have looked encouraging,” wrote ING economist Bert Colijn. “As uncertainty returns, renewed (though mild) stagflationary pressures are likely to weigh on the euro-zone economy over summer.”

In tariff-related news, the US will collect duties of between 10% and 12.5% on imports from most major trading partners, its biggest move yet to reconstruct Trump’s tariff wall that was pierced by the Supreme Court.

Corporate Highlights:

Intel Corp. delivered a revenue forecast that shattered Wall Street estimates as booming data center spending fuels a long-awaited turnaround. SAP SE reported better-than-expected sales for its cloud products, as Europe’s largest software company pushes its enterprise customers to upgrade systems and adopt a suite of artificial intelligence products. Volkswagen AG warned that sales may fall again this year as a deepening slump in China intensifies pressure on Chief Executive Officer Oliver Blume to overhaul Europe’s largest carmaker. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 0.5% as of 10:05 a.m. London time S&P 500 futures rose 0.2% Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average rose 0.4% The MSCI Asia Pacific Index fell 2.1% The MSCI Emerging Markets Index fell 2.5% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1383 The Japanese yen was little changed at 163.76 per dollar The offshore yuan was little changed at 6.7751 per dollar The British pound was little changed at $1.3318 Cryptocurrencies

Bitcoin was little changed at $65,153.61 Ether was little changed at $1,885.56 Bonds

The yield on 10-year Treasuries was little changed at 4.69% Germany’s 10-year yield declined two basis points to 3.19% Britain’s 10-year yield declined four basis points to 5.06% Commodities

Brent crude fell 3.3% to $97.33 a barrel Spot gold rose 0.2% to $4,056.17 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Neil Campling.

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