Stocks Hold Near Record Highs, Oil Ticks Higher: Markets Wrap

(Bloomberg) — Stocks held near record highs with traders looking to the next big data print from the US as bets on Federal Reserve interest-rate hikes eased. Oil climbed to $84 a barrel as a deal to reopen the Strait of Hormuz remained elusive.

US futures pointed to small gains at the open after the S&P 500 Index closed at a record on Friday following soft US jobs numbers. Contracts on the Nasdaq were up 0.4%. European tech stocks outperformed as the regional benchmark index held near last week’s record. MSCI’s Asian gauge traded up 0.6%.

JPMorgan Chase & Co. analysts lifted their S&P 500 year-end target to 8,000 from 7,800, saying a strong earnings season and faster AI monetization than expected for hyperscalers is boosting profit estimates. Focus now turns to US consumer price data due this week for clues on policy makers’ next moves as well as the outlook for a lasting deal on the Strait of Hormuz.

“With earnings largely in the rear-view mirror, geopolitics — and particularly Iran’s impact on oil prices and inflation expectations — should move back to the forefront,” said Fabio Caldato, portfolio manager at AcomeA Sgr. “We are focused on Wednesday’s US CPI print as a key test of the ongoing disinflationary process.”

Treasuries traded little changed after Friday’s jump in the wake of the jobs data, leaving the 10-year yield steady at 4.65%. The dollar edged higher against most of its Group-of-10 peers. Traders trimmed the likelihood of a rate hike at the Fed’s September meeting to a roughly 45% chance, down from 64% a week ago, according to swaps data compiled by Bloomberg.

Oil rose as much as 1.7% with Iran and Oman still short of a deal, while Houthi militants claimed an attack on a Saudi refinery near the Red Sea. Brent crude later pared the advance to trade at around $84.15 a barrel.

An agreement with Oman to establish a shipping route through Hormuz was “very close,” Iran’s Foreign Minister Abbas Araghchi said over the weekend. He ruled out direct talks with the US for now because of violations of an interim peace deal reached in June.

What Bloomberg Strategists Say…

“Oil is firmer on Monday after another weekend of stalled progress on reopening the Strait of Hormuz, yet traders are skeptical prices will rise for an extended period. Net long oil positioning showed only a tepid rebound in July, but that’s already being trimmed across crude contracts.”

— Mark Cranfield, MLIV. For full analysis, click here.

Elsewhere, gold was steady at about $4,355 an ounce after its best weekly gain for the metal since January.

In currencies, attention was on the yen, which traded weaker at around 158.30 per dollar. The yen has underperformed all its Group-of-10 peers this month as the boost from recent intervention fades, putting traders on alert for further official action.

Corporate News:

Taiwan Semiconductor Manufacturing Co. reported a 45% rise in its monthly sales, a sign of sustained demand for AI hardware in the face of market volatility. Berkshire Hathaway Inc. spent about $4.5 billion to buy back its own shares in the second quarter and purchased nearly $20 billion of equities in the period, signs that Chief Executive Officer Greg Abel is putting more of the firm’s cash pile to work. Sony Group Corp. and TSMC are in talks to spend a combined ¥1 trillion ($6.4 billion) on their planned joint factory in Japan, according to a person familiar with the plans. SK Hynix Inc. is considering options for its Chongqing, China-based facility, including bringing in an investor to help accelerate growth, according to people with knowledge of the matter. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 was little changed as of 9:30 a.m. London time S&P 500 futures rose 0.1% Nasdaq 100 futures rose 0.4% Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index rose 0.6% The MSCI Emerging Markets Index rose 0.7% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1565 The Japanese yen fell 0.5% to 158.49 per dollar The offshore yuan was little changed at 6.7439 per dollar The British pound was little changed at $1.3503 Cryptocurrencies

Bitcoin rose 0.3% to $65,267.12 Ether rose 0.4% to $1,927.22 Bonds

The yield on 10-year Treasuries was little changed at 4.65% Germany’s 10-year yield was little changed at 3.14% Britain’s 10-year yield advanced one basis point to 4.93% Commodities

Brent crude rose 0.3% to $83.84 a barrel Spot gold rose 0.3% to $4,356.13 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Matthew Burgess, Momoka Yokoyama and Anand Krishnamoorthy.

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