Global stocks rise on ceasefire hopes as oil jumps on Hormuz tensions

New York: Wall Street stocks advanced on Wednesday after U.S. President Donald Trump unilaterally extended a ceasefire in the Iran war, while oil prices resumed their upward climb after Iran tested the fragile truce by seizing cargo ships in the Strait of Hormuz. All three major U.S. stock indexes ended higher, with technology shares pushing the Nasdaq to the forefront. Gold rebounded from a one-week low, while the dollar edged higher. “Despite the energy shock and the barrage of headlines confronting investors, the macro economy, corporate fundamentals and consumer spending remain strong,” said Bill Merz, head of capital markets research at U.S. Bank Wealth Management in Minneapolis. “Investors are taking the view that the Strait of Hormuz will reopen before significant damage is inflicted on the global economy.” Iran’s Revolutionary Guards seized two vessels for alleged maritime violations just hours after Trump agreed to extend the ceasefire pending negotiations. Roughly one-fifth of global oil and liquefied natural gas supplies typically pass through the Strait of Hormuz. U.S. stocks, initially hit hard by the conflict, have since fully recovered, with both the S&P 500 and the Nasdaq reaching record closing highs in recent sessions. However, geopolitical uncertainty remains, and a prolonged period of elevated energy prices continues to pose risks. About two-thirds of S&P 500 companies that have reported earnings since early April have flagged concerns over energy costs during analyst calls, according to a Reuters review of transcripts. “Anytime a global event like the Middle East conflict dominates headlines, it shows up in earnings commentary,” Merz said. “But we’re not seeing it materially change behaviour just yet.” First-quarter earnings season is well under way, with analysts forecasting year-on-year S&P 500 earnings growth of 14.4% for the January–March period, according to the latest LSEG data. The Dow Jones Industrial Average rose 235.58 points, or 0.48%, to 49,384.72. The S&P 500 gained 57.95 points, or 0.82%, to 7,121.98, and the Nasdaq Composite climbed 326.49 points, or 1.35%, to 24,586.46. European shares closed lower European shares closed lower for the third consecutive session as Middle East tensions weighed on sentiment and investors assessed corporate earnings. Several multinational companies have withdrawn financial guidance or signalled price increases since the conflict began. MSCI’s global equity index rose 3.12 points, or 0.29%, to 1,069.58. Europe’s STOXX 600 fell 0.35%, while the FTSEurofirst 300 slipped 0.35%. Emerging market stocks declined 0.56%, while MSCI’s Asia-Pacific index excluding Japan fell 0.61%. Japan’s Nikkei edged up 0.40%. The dollar strengthened modestly against the euro amid ongoing geopolitical concerns. The dollar index rose 0.22% to 98.59, while the euro slipped 0.29% to $1.1708. Against the yen, the dollar rose 0.06% to 159.46. Crypto gains Bitcoin gained 4.27% to $78,974.43, while ethereum rose 3.5% to $2,398.86. U.S. Treasury yields edged higher but remained rangebound. The benchmark 10-year yield rose to 4.298%, while the 30-year yield climbed to 4.904%. The two-year note yield rose to 3.794%. Oil prices jumped after reports of ship seizures in the Strait of Hormuz and were further supported by a surprise drawdown in U.S. gasoline and distillate inventories. U.S. crude settled up 3.67% at $92.96 per barrel, while Brent crude rose 3.48% to $101.91 per barrel. Gold prices rose after touching a one-week low. Spot gold gained 0.44% to $4,732.61 an ounce, while U.S. gold futures rose 0.93% to $4,742.20 an ounce.