Stocks Rise, Oil Falls on Hopes for US-Iran Talks: Markets Wrap
(Bloomberg) — Wall Street traders drove stocks and bonds higher, with oil falling on hopes that mediated talks between the US and Iran will resume after a collapse in their fragile ceasefire deal.
At the end of a jittery week for markets, the S&P 500 bounced. While geopolitical tensions remained high, equities climbed as Reuters reported that Pakistan is exploring a path toward reviving negotiations between Washington and Tehran, following a push initiated by China. Brent crude dropped to around $96, sending Treasury yields down from their highest levels of the year.
The US and Iran exchanged limited strikes as the latest round of hostilities passed the two-week mark. Iranian Foreign Minister Abbas Araghchi held a phone call with his Omani counterpart Badr Albusaidi to discuss the security situation for maritime navigation and the passage of vessels through the Strait of Hormuz.
A week that began with spiraling Middle East violence has still culminated in elevated oil prices, reinforcing expectations that central banks may need to keep rates higher for longer. No immediate Federal Reserve moves are currently anticipated, but a summer of inflation angst is now looking likely to persist in financial markets.
The risk of further escalation is elevated, and a retest of oil price highs from earlier this year cannot be ruled out should military actions intensify, according to Ulrike Hoffmann-Burchardi at UBS Chief Investment Office. Still, she expects energy flows through the Strait of Hormuz to recover over time.
“This means that inflationary pressure should subside as the year progresses, and that an aggressive tightening cycle remains unlikely in the near term,” she said.
“As we have seen multiple times in the past few years, equity markets tend to overreact to war developments, partly because war events tend to create uncertainty,” said Thomas Lee at Fundstrat Global Advisors. “But these periods of risk-off have been buying opportunities in the past, and we expect this to be the case again.”
Among the reasons for optimism, Lee cited a solid earnings season. About 85% of the S&P 500 companies that have reported results so far have exceeded profit estimates, the highest proportion in five years, according to data compiled by Bloomberg Intelligence.
Traders are getting ready for next week’s reports from megacaps including Microsoft Corp., Meta Platforms Inc. and Apple Inc. Wall Street has been looking for more convincing evidence that the vast sums being poured into AI are generating new growth rather than weighing on profits.
On the economic front, US business activity expanded at the fastest pace in eight months as strong domestic demand for services offset cooling factory production, growing supply chain delays and rising costs. New-home sales climbed in June.
Corporate Highlights:
Intel Corp.’s upbeat quarterly report, which handily beat Wall Street estimates, still left a major question: how soon the chipmaker will line up outside customers for its factories. Qualcomm Inc., the biggest maker of smartphone processors, told customers that rising costs are forcing it to increase prices by a percentage in the double digits. BlackRock Inc. began marketing $12.3 billion of high-grade bonds to fund a Meta Platforms Inc. data center project as investors grapple with concerns about excessive AI infrastructure spending. American Express Co. said second-quarter expenses surged 12% as it spent more on marketing to attract and retain premium cardholders. SLB said it expects constructive oil and gas investment in 2027 driven by supply disruptions from the conflict in the Middle East. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.4% as of 12:50 p.m. New York time The Nasdaq 100 fell 0.5% The Dow Jones Industrial Average rose 0.5% The MSCI World Index rose 0.4% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1379 The British pound rose 0.1% to $1.3333 The Japanese yen was little changed at 163.76 per dollar Cryptocurrencies
Bitcoin fell 1.9% to $63,850.84 Ether fell 1.7% to $1,853.34 Bonds
The yield on 10-year Treasuries declined three basis points to 4.66% Germany’s 10-year yield declined three basis points to 3.17% Britain’s 10-year yield declined seven basis points to 5.03% Commodities
West Texas Intermediate crude fell 4.2% to $88.31 a barrel Spot gold rose 0.4% to $4,064.95 an ounce ©2026 Bloomberg L.P.
