US Stocks Hold Near Highs on Report of Iran Offer: Markets Wrap
(Bloomberg) — US stocks held near record highs as belief grew that the US and Iran could near a deal to restore Middle East oil flows, with traders also eyeing a raft of megacap tech earnings and central bank decisions this week.
S&P 500 futures were little changed. Brent crude rose more than 2.5% to $108 a barrel as the Strait of Hormuz remained largely shut after two months. Tehran signaled it would accept an interim agreement to reopen the waterway in exchange for the US lifting its blockade of Iranian ports, Axios reported Monday.
Global equities started the week at or near all-time highs, with the S&P 500 up nearly 10% this month. An unprecedented rally in chipmakers, fueled by artificial intelligence demand, and a robust earnings season have driven an eye-catching rebound after the war in the Middle East upended energy flows.
In what is shaping up to be one of the busiest weeks for so far this year, four tech hyperscalers — Alphabet Inc., Microsoft Corp., Amazon.com Inc. and Meta Platforms Inc. — are due to report Wednesday, followed by Apple Inc. a day later. Representing about a quarter of the S&P 500’s market capitalization, the firms will give investors a clear read on whether the rally is sustainable.
Wednesday will also see the Federal Reserve deliver its latest interest-rate decision, with central bank officials across the Group of Seven also meeting during the week as investors eye how policymakers will confront the risk of a war-driven inflation shock.
“Markets are looking for a new narrative and are jumping back to the AI boom for now,” said Joachim Klement, head of strategy at Panmure Liberum. “However, most investors seem to be guided by uncertainty and are still assessing the fallout from the Iran war. This could mean that a new macro story will emerge soon.”
European stocks were little changed while Asia tracked Friday’s Wall Street gains. Bonds fell across the world as oil prices continued to rise, with the 10-year Treasury yield two basis points higher at 4.32%. The dollar was 0.1% lower, while gold was little changed.
“Even if we do get a deal, oil is not going back to pre-war levels,” wrote Mohit Kumar, chief economist and strategist for Europe at Jefferies. “We need to factor in some degree of stagflationary impact. The US should be the least impacted, South Asia the most impacted, while Europe should be somewhere in between.”
Corporate News:
Nomura Holdings Inc. shares fell after its fourth-quarter profit missed analysts’ estimates, due to writedowns and a loss in Europe. Sun Pharmaceutical Industries Ltd. agreed to acquire New York-listed women’s health-care company Organon & Co., in what is likely to be one of the biggest India outbound deals in years. A group of budget airlines including Frontier and Avelo is seeking $2.5 billion in government assistance in exchange for warrants that could convert into equity stakes in the companies, the Wall Street Journal reported, citing people familiar with the matter. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 was little changed as of 8:30 a.m. London time S&P 500 futures were little changed Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average fell 0.2% The MSCI Asia Pacific Index rose 1.1% The MSCI Emerging Markets Index rose 1.3% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro was little changed at $1.1731 The Japanese yen was little changed at 159.24 per dollar The offshore yuan rose 0.1% to 6.8271 per dollar The British pound was little changed at $1.3536 Cryptocurrencies
Bitcoin fell 0.7% to $77,688.79 Ether fell 1.9% to $2,319.91 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.32% Germany’s 10-year yield advanced two basis points to 3.01% Britain’s 10-year yield advanced three basis points to 4.94% Commodities
Brent crude rose 2.5% to $108 a barrel Spot gold rose 0.1% to $4,716.45 an ounce This story was produced with the assistance of Bloomberg Automation.
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