Wall Street rises, oil retreats, ASX set to jump; Meta tumbles; Australian dollar jumps
Stan Choe
Oil prices soared, rising to their highest levels since the start of the war with Iran, but those jumps quickly disappeared. Meanwhile, the US stock market is on the rise following strong earnings reports from major companies like Alphabet.
The S&P 500 rose 0.8 percent, remaining just above its all-time high set earlier this week as companies continue to deliver higher profits at the start of 2026 than analysts expected despite sky-high oil prices and uncertainty about the economy. The Dow Jones rose 725 points (1.5 percent), while the Nasdaq composite rose 0.7 percent.
The Australian share market is poised to move higher, with futures at 5.03am (AEST) pointing to a 127-point, or 1.5 per cent, rise at the open. The ASX lost 0.2 per cent on Thursday. The Australian dollar rose 1.2 percent to 72.01¢.
Alphabet led the way on Wall Street, rising 9.4 percent after the owner of Google and YouTube reported profits in the latest quarter that nearly doubled analysts’ expectations. CEO Sundar Pichai said investments in AI are “illuminating every part of the business.”
The stabilization on Wall Street followed manic swings in the oil market, where prices rose overnight on concerns that the Iran war would impact the flow of crude oil for a long time. Iran closes the Strait of Hormuz to oil tankers, keeping them confined to the Persian Gulf and away from customers around the world; The US Navy blockade also prevents Iran from selling its own oil.
Traders are always buying and selling contracts for different types of oil and go out for months. The price of a barrel to be delivered in June briefly rose above $126 overnight and then fell to $114.09 at 04.29 GMT. US oil fell 1.4 percent to $105.44.
The price of Brent is still much more expensive than its pre-war level of around $70. But the morning’s easing and continued better-than-expected profit reports from U.S. companies helped Wall Street hold steady at near-record levels.
Caterpillar and Eli Lilly were up more than 10 percent, and Royal Caribbean was up 4.4 percent after posting profits that beat analysts’ expectations in the latest quarter. This is important because stock prices tend to follow corporate profits over the long term.
Still, a better-than-expected result isn’t always enough to boost the stock’s price if it’s already moved much higher.
Meta Platforms fell 8.8 percent even though the company behind Facebook and Instagram made more profit than expected last quarter. Investors have focused more on Meta’s rising estimate of how much it will spend this year on data centers and other investments as it develops its AI capabilities; this figure ranges from US$125 billion to US$145 billion.
Doubts remain high among some investors about whether the AI spending by Meta and other companies will generate enough profits and productivity to be worth it.
Microsoft fell 5.2 percent after similarly raising its forecasts for investments and other capital expenditures. But analysts also said accelerating trends in the Azure business were encouraging.
Amazon lost 1.1 percent of its value in the last quarter, even though it beat analysts’ earnings expectations.
In the bond market, Treasury yields fell after oil prices gave up big overnight gains. Reports also suggested that US economic growth accelerated less than economists expected in the first three months of the year, while inflation readings worsened as much as expected in March.
A separate report said fewer U.S. workers filed for unemployment benefits last week even as companies announced major workforce cuts. This was an indication of fewer layoffs.
The yield on the 10-year Treasury note fell to 4.39 percent from 4.42 percent late Wednesday.
Indices in foreign stock markets rose in Europe after the weak closing in Asia.
London’s FTSE 100 Index rose 1.6 percent after the Bank of England kept its key interest rate steady. This follows similar decisions by the US Federal Reserve on Wednesday and the Bank of Japan on Tuesday to keep interest rates unchanged.
After the European Central Bank kept its interest rates constant, Germany’s DAX index gained 1.4 percent in value, while France’s CAC 40 index increased by 0.5 percent.
The Hang Seng index in Hong Kong lost 1.3 percent, while stocks in Shanghai rose 0.1 percent after a report said China’s factory activity slowed slightly in April but remained in expansion territory for a second month.
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