Wall Street swings lower, ASX set to rise
Stan Choe
Updated ,first published
Oil prices and stock markets around the world had a shaky Monday due to uncertainty about what will happen in the Iran war.
The S&P 500 closed down 0.1 percent after swinging between gains and losses; This was its second loss since reaching an all-time high last week. The Dow Jones index rose 159 points, or 0.3 percent, and the Nasdaq composite fell 0.5 percent after both indexes yo-yoed the same.
Futures at 06:24 AEST are pointing to a gain of 96 points, or 1.1 per cent, at the open as the Australian share market prepares to recoup much of the previous session’s heavy losses. The ASX fell 1.5 per cent on Monday. The Australian dollar was trading at 71.65¢.
U.S. stock prices moved in the opposite direction to oil prices, which have fluctuated due to uncertainty about how long the Iran war will keep the Strait of Hormuz closed and prevent oil tankers from delivering crude oil. The barrel price of Brent crude oil, the international standard, rose again after falling from $112 overnight to below $107 in the morning.
After settling at $112.10 a barrel, the price of Brent fell below $109 after President Donald Trump said Tuesday he would postpone a planned military strike against Iran at the request of allies in the region. This kept alive hopes that an agreement to open the Strait of Hormuz might still be possible.
Movements in oil prices have helped world bond markets become the focus of movement recently. Rising yields there have increased pressure on economies and stock markets around the world.
Higher yields make it more expensive for households and businesses to borrow; US home buyers know this because of high mortgage rates. Higher interest rates could also make it harder for companies to borrow money to build data centers for the artificial intelligence technology that drives much of the U.S. economy’s growth.
In the bond market, the yield on the 10-year Treasury note rose as high as 4.63 percent, then fell to 4.59 percent late Friday. The yield on the 10-year Japanese government bond rose to its highest level since the late 1990s.
Yields around the world are rising due to fears of higher inflation caused by higher oil prices; This could push central banks not only to abandon the possibility of lowering interest rates, but also to consider raising them. Higher rates would slow inflation at the expense of hurting the economy and driving down stock and other investment prices.
A spate of solid reports on the U.S. economy lately, along with concerns about the U.S. government’s large and growing debt problem, have been pushing yields higher.
On Wall Street, Regeneron Pharmaceuticals fell 9.8 percent to help lead the U.S. stock market lower after it reported discouraging data from its melanoma treatment trial.
NextEra Energy fell 4.6 percent after agreeing to acquire Dominion Energy in an all-stock deal to create the world’s largest regulated electric utility by market value. Dominion rallied 9.4 percent.
Delta Air Lines closed generally flat after experiencing ups and downs throughout the day due to oil prices. It soared following news that Berkshire Hathaway had bought more than $2.6 billion ($3.6 billion) worth of shares in the airline. Under its former leader, Warren Buffett, Berkshire Hathaway gained a reputation as a value investor able to buy stocks at low prices.
Boston Scientific was also a gainer, rising 6.2 percent after it said it would spend $2 billion of its previously announced $5 billion share buyback program by the end of June. Such acquisitions send cash directly to investors and increase the company’s earnings per share.
Overall, the S&P 500 fell 5.45 points to 7,403.05 points. The Dow Jones Industrial Average rose 159.95 to 49,686.12, while the Nasdaq composite fell 134.41 to 26,090.73.
We’ll be offering little data on the U.S. economy next week, but the highly anticipated report on Nvidia’s latest quarterly results will arrive on Wednesday. While the chip company routinely beats analysts’ expectations every quarter, it’s projecting bigger growth than Wall Street thought. AI stocks will likely need to keep up this momentum to push the market to more records.
Target, Home Depot and Walmart will also report their latest quarterly results this week.
Indices on stock markets abroad fell in most of Asia, but reversed losses in Europe and finished on the rise. Japan’s Nikkei 225 index fell 1 percent, but Germany’s DAX index returned 1.5 percent due to two of the world’s biggest moves.
access point
The Market Summary newsletter is a summary of the day’s transactions. Let’s each take ittoday afternoon.
