Wall Street rises as oil prices swing, ASX set to edge up
Stan Choe
Updated ,first published
US stocks rose after strong earnings reports from BlackRock and other major companies. The temporary gains came as oil prices rose to one-month highs due to the war with Iran.
The S&P 500 rose 0.4 percent after swinging between modest gains and losses for the day, returning within 0.5 percent of the all-time high it set last month. The Dow Jones gained 150 points, or 0.3 percent, and the Nasdaq composite rose 0.6 percent.
The Australian share market is set to move slightly higher, with futures at 6.09am AEST pointing to a gain of 10 points, or 0.1 per cent, at the open. The ASX gained 0.4 per cent on Wednesday. The Australian dollar is stronger at 70.12¢.
BlackRock led the market with a 6.6 percent rise after the company behind some of the most popular mutual funds reported stronger profits and revenue than analysts expected in the latest quarter. CEO Laurence Fink said iShares funds totaled more than $6 trillion ($8.6 trillion) in assets under management during the quarter, roughly doubling in three years.
Bank of New York Mellon rose 5.1 percent a day earlier, following strong earnings reports from many of the largest U.S. banks. Cintas rose 4.4 percent after the provider of office uniforms, toiletries and other products similarly posted a better-than-analyst-expected profit in the latest quarter.
They helped offset the decline of Elevance Health, which fell 8.5 percent despite reporting stronger profits and revenue than analysts expected.
Expectations for profit increases for US companies in the spring are high. With the indexes close to their records, they will need to beat them to justify the big moves made by stock prices.
Overall, the S&P 500 rose 28.81 points to 7,572.40, within 0.5 percent of the record set early last month. Dow Jones index increased by 150.37 to 52,658.64, and Nasdaq index increased by 162.22 to 26,269.23 points.
The broader U.S. stock market got a boost last month from another report showing inflation slowing. He said wholesale inflation had slowed to 5.5 percent from 6 percent in May, which was much better than the acceleration economists had expected.
A separate report published the other day said inflation felt by US consumers was not as bad as economists expected last month.
These figures ease the pressure on the Federal Reserve, which is considering raising interest rates. Higher rates will limit inflation, but they will also slow the economy and hurt the prices of all kinds of investments.
Following the inflation report, investors think there is only a 10 percent chance that the Fed will raise its key interest rate at its meeting in a few weeks. That’s lower than the roughly 42 percent probability they saw before inflation reports on Monday, according to data from CME Group.
New York Fed President John Williams’ speech also helped lower expectations. “There are encouraging reasons to expect that inflation has peaked and will decline in the coming quarters,” he said.
Meanwhile, Fed Chairman Kevin Warsh offered a few hints about what to expect in his testimony before the Senate committee. “Any central banker would be happy to see the data going in the right direction,” he said of this week’s encouraging inflation reports, but “these are all imperfect measures of the underlying state of inflation.”
The yield on the 10-year Treasury note fell to 4.55 percent at the end of Tuesday, from 4.58 percent and from 4.62 percent the day before.
The upward pressure on inflation continues due to the war with Iran, which has been subject to mutual attacks by the USA and Iran in the Middle East for days.
The barrel price of Brent crude oil briefly rose above $86 in the morning hours, then fell to $84.95 per barrel, an increase of 0.3 percent compared to the previous day.
South Korea’s Kospi index increased by 6.2 percent in stock markets abroad.
The Seoul market is dominated by two major tech companies, Samsung Electronics and SK Hynix, and its main index has fallen 8.9 percent, 7.9 percent and 5.3 percent so far this month due to sharp swings in stocks caught up in the AI boom.
ASML in Amsterdam reported stronger-than-expected revenue growth in the latest quarter. CEO Christophe Fouquet said continued progress in artificial intelligence is accelerating customers’ growth, and the chipmaking machine maker gave a revenue growth forecast that beat analysts’ expectations.
ASML’s shares in Amsterdam fell 0.4 percent, but its U.S.-listed shares rose 2.2 percent.
His strong prediction helped calm some of the concerns about AI that have driven stocks higher recently. Chief among these is the possibility that their prices will be too high due to the enthusiasm around artificial intelligence.
In China, stocks rose 1.4 percent in Hong Kong and fell 0.3 percent in Shanghai after the government announced that the world’s second-largest economy grew by 4.3 percent on an annual basis last quarter.
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