Stocks rally, oil falls on growing optimism for Middle East ceasefire

Stocks in the US and Europe rallied and oil prices extended their decline as US President Donald Trump moved to cool the conflict in the Middle East and broker a ceasefire, even as Iran set out its own demands for peace.

Chipmakers and semiconductor firms paced gains on Wall Street, with Nvidia, Intel and Advanced Micro Devices among those leading the major indices higher after London-listed Arm Holdings debuted its first inhouse chip.

Meanwhile, Sharesies favourite Rocket Lab joined a broader surge in space-related companies amid reports Elon Musk’s SpaceX is poised to file its prospectus this week in a mammoth US$75 billion initial public offering.

And while Australian futures are pointing to an upbeat start to the day for the ASX, New Zealand’s focus will be on whether KMD Brands can settle terms for its capital raising after delaying the release of its first-half earnings and T&G Global is back in focus with reports across the Tasman that the fruit exporter’s sale process is back on.

Holding out hope

Brent crude oil futures fell 3.3% to US$97.01 a barrel amid growing signs the US is seeking a diplomatic end to the war with Iran, with the White House saying it’s had productive talks with Iran and that work is underway to get vice-president JD Vance to Pakistan to discuss an end to the conflict.

Still, Iran’s state media rejected the US ceasefire proposal, countering with its owns demands, including recognition of the Islamic Republic’s authority over the Strait of Hormuz and reparations.

“Financial markets have maintained the cautiously positive tone on hopes that the conflict in the Middle East may be getting closer to a resolution,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “Investors are largely looking through the lack of a clear response from Tehran for now, betting instead that President Trump is searching for a diplomatic offramp.”

The Polymarket prediction market is pricing a 50% chance of a ceasefire by the end of April and stock markets in Europe and the US rallied on growing optimism a deal will be reached.

Chipmakers were among the day’s gainers, with the tech-heavy Nasdaq Composite up 1% in late trading after Arm Holdings surged 19% on revealing its debut inhouse chip. Meanwhile, Meta Platforms and Alphabet shrugged off a New Mexico jury found that the Instagram owner and Alphabet’s Google were negligent for operating a product that harmed minors and failed to warn them, with both firms on the green side of the ledger in late trading.

The Dow Jones Industrial Average rose 0.7% in late trading, led by Merck & Co, Honeywell International and Sherwin-Williams, while the S&P 500 was also up 0.7%.

Space is the place

Rocket Lab surged 7.7% to US$71.175, with space-related stocks buoyed by reports that SpaceX will lodge its prospectus this week for a US$75 billion IPO mooted.

Across the Atlantic, the UK’s FTSE 100 and Germany’s DAX both climbed 1.4%, while France’s CAC 40 advanced 1.3%.

Australian futures are pointing to a 0.5% gain for the resources-heavy S&P/ASX 200 index when trading opens across the Tasman, with gold futures rising 3.5% to US$4,555 an ounce at 7am in Auckland and US banking stocks broadly stronger overnight.

New Zealand’s S&P/NZX 50 index yesterday jumped in its biggest one-day gain since May last year, with a focus on retailers ahead of earnings from Warehouse Group and Hallenstein Glasson Holdings on Friday.

KMD Brands was scheduled to report its first-half earnings on Wednesday, but pushed that out until today or Friday as it negotiates terms on a planned capital raising.

Meanwhile, T&G Global will be in view after The Australian’s Dataroom column reported the fruit exporter has tapped Goldman Sachs to help with a sale process, reviving plans mooted last year as its controlling shareholder BayWa moves to shore up its own balance sheet.

No local data are scheduled for today, while the Treasury’s NZ Debt Management arm will sell $450 million of bonds at this week’s auction. The yield on 10-year government bonds eased to 4.72% yesterday, while the kiwi dollar traded at 58.20 US cents at 7am in Auckland from 58.23 cents yesterday.

And the government’s Friday update on a framework for escalating fuel rationing will be sharply in view after Politik today reported the NZOilWatch website is challenging official oil inventory figures, and noted a private briefing on the fuel crisis was held yesterday for top business chief executives.

Reporting by Paul McBeth. Image from Robert Bye on Unsplash.