Stocks Rebound, Oil Falls as US Ends Iran Strikes: Markets Wrap

(Bloomberg) — Traders are buying the dip in stocks as a swift conclusion to the latest round of US strikes against Iran raised expectations that talks to reopen the Strait of Hormuz will get back on track.

S&P 500 futures rose 0.7% to recover from a five-week low. Nasdaq 100 contracts advanced 1.2%. US Central Command called an end to “additional self-defense” strikes about four hours after launching attacks on multiple targets in Iran, with Brent reversing gains to trade down 1% near $92 a barrel.

The worries of further escalation lingered as President Donald Trump told Fox News the US would hit Iran again if its leaders didn’t sign an interim peace deal. Iran’s foreign ministry said the latests attacks rendered the existing ceasefire deal “meaningless.” Traders, however, drew reassurance from the belief that an escalation was in neither side’s interest.

“We’re keeping our overweight equity exposure,” said Christophe Boucher, chief investment officer at ABN Amro Investment Solutions. “The market has taken the view that Trump doesn’t want to escalate further and has no interest in seeing oil prices surge again.”

Treasury yields fell across the curve, while the dollar was little changed. European stocks rose 0.5%, with gains led by energy shares.

The European Central Bank is expected to raise interest rates later on Thursday for the first time since 2023, concluding it can no longer ignore inflationary pressures stemming from the war in Iran. Traders will also follow comments by ECB President Christine Lagarde on policymakers’ outlook for the months ahead.

Meanwhile, a flood of new shares from companies looking to fund their AI ambitions is raising questions on Wall Street about whether there will be enough buyers to soak them all up.

SpaceX’s IPO attracted demand for more than four times the available shares, according to people familiar with the matter.

“Investors can’t help but have one eye on the SpaceX IPO, and there’s nervousness about how markets will react to it,” said Josh Gilbert, lead analyst for Asia Pacific and the Middle East at Etoro Ltd. “How markets absorb the biggest listing in history at a rich valuation will tell us a lot about whether the appetite for the AI trade is still sky high.”

What Bloomberg’s Strategists Say…

“With SpaceX’s $75 billion IPO set to be priced today, investors have been raising cash, reducing leverage and reallocating capital to prepare. The resulting concentration of capital is generating short-term liquidity pressures that are weighing down broader risk assets.”

— Andre de Silva, Markets Live strategist. Click here for the full analysis.

Corporate Highlights:

Oracle Corp. shares slumped in premarket trading after the company reported quarterly capital expenses that were higher than estimates, raising investor concerns about the profitability of the AI infrastructure business. Super Micro Computer Inc. sank after the company announced a plan to raise $7 billion through a package of equity offerings, a move meant to help pay for the production of more AI servers. OpenAI is considering drastically lowering the prices it charges users as it seeks to win customers from its archrival Anthropic. SpaceX’s initial public offering has attracted demand for more than four times the available shares, according to people familiar with the matter. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 0.4% as of 9:22 a.m. London time S&P 500 futures rose 0.7% Nasdaq 100 futures rose 1.2% Futures on the Dow Jones Industrial Average rose 0.7% The MSCI Asia Pacific Index fell 0.4% The MSCI Emerging Markets Index fell 0.3% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1542 The Japanese yen was little changed at 160.51 per dollar The offshore yuan was little changed at 6.7796 per dollar The British pound was little changed at $1.3376 Cryptocurrencies

Bitcoin rose 1.7% to $62,793.09 Ether rose 1.7% to $1,656.24 Bonds

The yield on 10-year Treasuries declined two basis points to 4.53% Germany’s 10-year yield was little changed at 3.07% Britain’s 10-year yield was little changed at 4.93% Commodities

Brent crude fell 0.9% to $92.23 a barrel Spot gold rose 0.7% to $4,102.38 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Neil Campling and Anand Krishnamoorthy.

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