Equities Experience Mixed Performance, Oil Prices Dip Amid Preparations for US-Iran Diplomatic Talks
Detailed Analysis
Market Volatility Persists as Investors Await U.S.-Iran Talks
The U.S. stock market experienced a mixed outcome on Friday, with oil prices dipping as investors anxiously awaited U.S.-Iran talks scheduled for the weekend. The talks come as the U.S. and Iran earlier this week agreed to a cease-fire to try to end the near six-week war that has resulted in the worst energy-supply disruption in history.
Despite a broad Asian stocks index posting its best week in three-plus years, the market ended the week on edge over whether coming talks will bring a lasting cessation to the conflict. Iran reiterated demands for its assets to be unblocked and for an end to Israel's attacks on Lebanon, while President Donald Trump threatened more strikes if Iran does not agree to its demands.
Oil prices remain elevated, even after slumping dramatically on Wednesday after Trump called off threatened attacks on Iran's infrastructure. Traffic through the key Strait of Hormuz, used to transit one-fifth of global oil and gas supply, remains at a fraction of pre-war levels, with most of the ships that sailed through the strait in the past day linked to Iran.
Key Market Indicators
| Market Index | Change | Percentage Change | | --- | --- | --- | | Dow Jones Industrial Average | -0.6% | 47,916.57 | | S&P 500 | -0.1% | 6,816.89 | | Nasdaq Composite | 0.4% | 22,902.89 | | MSCI's broadest index of Asia-Pacific shares outside Japan | 0.9% | 7.3% |
Oil futures dipped on Friday, with U.S. crude settling down $1.30 to $96.57 a barrel and Brent finishing at $95.20 a barrel, down 72 cents.
For the week, the S&P 500 rose 3.6%, the Dow gained 3%, and the Nasdaq rose 4.7% with all three logging their biggest weekly percent gains since November.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.9% to put it up 7.3% for the week, its biggest advance since November 2022.
U.S.-Iran Talks and Inflation
Tehran and Washington delegations are due to meet for peace talks on Saturday. Iran's Parliament Speaker Mohammad Baqer Qalibaf arrived in Islamabad on Friday, according to Iranian media. Israel said on Thursday that it was seeking talks with Lebanon as Iran has cited Israel's continuing attacks on Lebanon as a key sticking point in its ceasefire agreement with the United States.
The war's effect on prices is already being felt. U.S. consumer prices increased by the most in nearly four years in March, while China's factory-gate prices rose for the first time in 3-1/2 years in March, official data showed earlier.
Market Sentiment and Earnings
Peter Tuz, president of Chase Investment Counsel, said that investors are also anxious about the start of first-quarter earnings season next week. Tuz noted that earnings guidance from executives has contained "more uncertainty than usual."
However, Tuz said results from Taiwan's TSMC were encouraging, as the world's largest contract chip manufacturer reported a 35% surge in first-quarter revenue, exceeding forecasts, thanks to artificial intelligence-related demand. The report lent support to the tech shares, with the Philadelphia semiconductor index rising 2.3%.
The dollar index fell 0.2% to 98.68, closing out its biggest decline since January. The euro rose 0.25% to $1.1728. The dollar gained 0.2% against the Japanese yen to 159.3.
U.S. Treasury yields edged slightly higher. The yield on benchmark U.S. 10-year notes rose 2.4 basis points to 4.317% while the 30-year bond yield rose 1.1 basis points to 4.909%.
