Wall Street steady, oil prices rise, ASX set to fall; Microsoft, OpenAI loosen partnership
Stan Choe
Updated ,first published
The record-breaking rise of US stock markets slowed over the weekend as uncertainty about what will happen next in the Iran war increased and oil prices rose.
The S&P 500 index rose 0.1 percent to an all-time high, following weeks of big gains fueled by strong corporate earnings reports and hope that the economy can avoid a worst-case scenario from war. While the Dow Jones fell 62 points (0.1 percent), the Nasdaq composite broke its own record with a 0.2 percent increase.
The Australian share market is poised for a pullback, with futures pointing to a decline of 56 points, or 0.6 per cent, at the open at 6.23am (AEST). The ASX lost 0.2 per cent on Monday. The Australian dollar rose 0.5 percent to 71.48¢.
Movements were stronger in the oil market, where prices rose more than 2.5 percent as tankers found the Strait of Hormuz still effectively closed. This means keeping crude oil trapped in the Middle East and away from customers around the world, including oil produced by Iran and blockaded by the US Navy.
Iran has offered to reopen the strait if the United States lifts the blockade, while suggesting that discussions on the larger issue of its nuclear program will take place at a later stage. However, it seems unlikely that US President Donald Trump will accept Pakistan’s offer to the Americans.
Over the weekend, Trump told US envoys not to travel to Pakistan, which plays an important mediating role. Saying that the Iranians could call Washington with any offer, Trump appeared to signal that he was content to continue pressuring Iran with the blockade.
The price of a barrel of Brent crude oil to be delivered in June increased by 2.8 percent to $108.23. Brent for delivery in July, when most of the trading takes place in the oil market, rose 2.6 percent to $101.69 per barrel.
Brent prices were only around US$70 per barrel before the war and briefly jumped as high as US$120 on several occasions when war-related fears were at their height.
Despite pricier fuel bills, most major U.S. companies are reporting stronger profit growth in early 2026 than analysts expected. That has helped the S&P 500 rise 13 percent since its low in late March.
Next week could be a blockbuster for the market as some of Wall Street’s most influential stocks report earnings. Alphabet, Amazon, Meta Platforms and Microsoft are scheduled to report only on Wednesday. Apple will report on Thursday.
Overnight, it was announced that Microsoft had lost exclusive access to OpenAI technology, paving the way for the ChatGPT creator to sell its products on rival cloud platforms in a sweeping reshuffle to one of the most important alliances of the AI era. The reorganized merger, jointly announced by the companies on Monday, retains Microsoft as OpenAI’s primary cloud partner with a license to the startup’s intellectual property through 2032. This also paves the way for OpenAI to move its models to Amazon.com’s cloud without any technical workarounds.
Verizon Communications joined the list of companies that beat analysts’ expectations on Monday, with its shares rising 1.5 percent after the company said it added more postpaid phone customers than it lost in the first quarter for the first time since 2013. It also raised its forecast for profit growth this year, even though its revenue in the first quarter fell short of analysts’ expectations.
Domino’s Pizza helped drag the market, falling 8.8 percent after reporting that its profit and revenue in the latest quarter were weaker than analysts expected.
Overall, the S&P 500 rose 8.83 points to 7,137.91. The Dow Jones Industrial Average fell 62.92 to 49,167.79, and the Nasdaq composite index rose 50.50 to 24,887.10.
Following the rise in oil prices in the bond market, Treasury yields began to rise. The yield on the 10-year Treasury note rose to 4.33 percent from 4.31 percent at the end of Friday.
The Federal Reserve will announce its latest move on short-term interest rates on Wednesday, and the common expectation among traders is that it will keep the federal funds rate steady. Lower rates could stimulate the economy, but they could also threaten to worsen inflation when oil becomes more expensive and tariffs threaten to raise prices of all kinds of other goods.
Wednesday will likely be Chairman Jerome Powell’s last meeting leading the Fed. His term as president is scheduled to end next month, and Trump has already named a candidate to replace him, Kevin Warsh.
The European Central Bank, the Bank of Japan and the Bank of England will also announce their interest rate decisions this week.
Indices in foreign stock markets fell in Europe after the strong closing in Asia. South Korea’s Kospi index rose 2.2 percent and Japan’s Nikkei 225 index rose 1.4 percent, the two biggest moves in the world.
AP via Reuters
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