Stocks in Europe and on Wall Street rallied, with travel stocks such as American Airlines and cruise operator Carnival Corp among those leading the charge as the ceasefire between Iran and Israel remains in place, albeit with both nations attracting a harsh rebuke from US President Donald Trump.
The kiwi dollar remained elevated and oil prices extended their declines as Israel confirmed the ceasefire and lifted nearly all wartime restrictions, while Iran’s foreign minister said his nation would stop all attacks provided Israel did.
Meanwhile, US Federal Reserve chair Jerome Powell reaffirmed the central bank’s wait-and-see stance on cutting interest rates further in testimony before US lawmakers.
And Uber Technologies was among Wall Street’s leaders after the ride-sharing company and Waymo launched their own self-driving tax service in Atlanta, Georgia just days after Tesla’s launch of its Robotaxi offering in Austin, Texas.
Shaky start
Brent crude oil prices have dropped almost 13% so far this week after extending their declines as Israel and Iran ended their hostilities in recent weeks. The shaky start earned a rebuke from US President Donald Trump but both nations have affirmed the ceasefire. The kiwi dollar traded at 60.19 US cents at 7am in Auckland from 60.13 cents yesterday.
Stock markets on both sides of the Atlantic rallied on the news, with the S&P 500 up 1.2% in the US, while Germany’s DAX 30 advanced 1.6%.
“Global equity markets have made solid gains following the ceasefire between Israel and Iran which has provided optimism for a lasting resolution to the conflict,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “Brent crude fell towards US$67 per barrel and below the level ahead of Israel’s attacks on Iran’s nuclear sites.”
Travel and tourism companies were among the stronger performers, with American Airlines up 4.7% in late trading and cruise operator Carnival advancing 7.5%.
Australian carrier Virgin Australia returned to the ASX yesterday and surged higher on debut, reigniting optimism about initial public offerings with fellow debutante Greatland Resources also enjoying a strong first day.
Not all happy
Defence and energy companies gave up recent gains as tensions subsided and oil prices declined, with Exxon Mobil down 3.2% and Northrop Gruman declining 3.4% in late trading.
Meanwhile, Uber Technologies surged 8.1% after launching a new self-driving taxi service with Waymo, just days after Tesla’s Robotaxi launch in Austin. Tesla declined 1.6%.
Artificial intelligence companies got a win in a San Francisco court where a federal judge ruled Anthropic’s use of books without permission to train its AI system was legal under US copyright law.
US Fed chair Jerome Powell kicked off his testimony on Capitol Hill, telling lawmakers rate cuts can still wait until the central bank sees the impact of tariff increases. He acknowledged recent data support the case for lower rates, but emphasised the prospect of import levies lifting prices.
Australian futures are pointing to a 0.1% gain for the S&P/ASX 200 index today, after yesterday’s gain snapped a five-day losing streak. New Zealand’s benchmark S&P/NZX 50 index has spent the past five sessions in the red.
Local data today include New Zealand’s May trade balance, which is expected to show a narrower annual trade deficit, while Australian inflation is expected to show a softening in annual consumer price pressure.
Reporting by Paul McBeth. Image from Ian Hutchinson on Unsplash.