Wall St nudges higher on hopes of Iran deal

Stocks on Wall Street nudged up in late trading, setting a strong lead for Australia and New Zealand, as renewed optimism for a peace deal in the Middle East pushed down oil prices after US Secretary of State Marco Rubio said there were good signs for an agreement.

International Business Machines led the Dow Jones Industrial Average higher, surging on a US$1 billion grant to build quantum computers, while Nvidia eased after its latest record quarterly earnings and Walmart slumped as it left its annual outlook unchanged despite enjoying a strong quarter.

Local space sector favourite Rocket Lab declined as it after announcing plans to raise up to US$3 billion through future share sales, and as Elon Musk’s SpaceX filed its paperwork to go public next month.

And the more positive mood is set to flow through to the antipodes, with Australian futures pointing to a gain for the ASX, while Oceania Healthcare’s annual earnings and Statistics New Zealand’s March quarter consumer spending figures are the main domestic events today.

New hope

Brent crude oil futures dipped 0.4% to US$104.54 a barrel and the volatility index, known as Wall Street’s fear gauge, fell 3.3% to 16.87 amid the latest optimism that the US and Iran would reach a ceasefire, with US Secretary of State Rubio saying there were “some good signs” that a deal could be reached.

The Polymarket prediction market was pricing in a 22% chance of a permanent peace by the end of the month and a 41% chance by the end of June. The kiwi dollar traded at 58.71 US cents at 7am in Auckland from 58.64 cents yesterday.

Stocks on Wall Street rose, with the Dow up 0.6% in late trading, led by a 12% surge for IBM after the company secured a US$1 billion grant from the US Commerce Department to build quantum computers.

Other leaders included Honeywell International and Cisco Systems.

US tech stocks were more muted, with the Nasdaq Composite up 0.1%. Nvidia’s latest record quarter met a muted response, with the chip giant dipping 2%, while software firm Intuit sank 20% as it said it would lay off 17% of its workforce as it morphed into an artificial intelligence-first platform.

Walmart was down 6.9% in late trading despite a strong quarter, with the retailer keeping its annual outlook unchanged.

Life on Mars

Meanwhile, SpaceX filed the paperwork for its upcoming initial public offering to raise up to US$80 billion. Local favourite Rocket Lab was down 7.2% at US$124.58 after disclosing its latest equity distribution agreement with 16 firms to act as agents in periodically selling as much as US$3 billion of new shares.

Europe was mixed, with the UK’s FTSE 100 nudging up 0.1%, while Germany’s DAX fell 0.5% and France’s CAC 40 dipped 0.4% with plane-maker Airbus weighing on the continental bourses.

The improving mood is expected to flow through to the antipodes, with futures pointing to a 0.4% gain for the S&P/ASX 200 index when trading opens across the Tasman.

New Zealand’s S&P/NZX 50 index jumped 0.9% yesterday, with Infratil touching a new record. The benchmark has dropped 0.7% so far this week.

“For the NZX today, lower oil prices, easing bond yields, and a stronger Wall Street lead should support sentiment at the open,” Moomoo market strategy consultant Greg Boland said in a note. “Investors will likely continue watching technology and infrastructure names following Nvidia earnings, while local focus may shift toward upcoming retail sales data and whether recent strength in exporters and industrials can continue.”

Oceania Healthcare is due to report its annual result today, with Forsyth Barr analysts predicting a 9.2% profit increase as the aged-care business simplifies its business to improve the operations.

Asset Plus is also due to report.

On the data radar today, Stats NZ’s March quarter retail sales are expected to show a 0.5% lift in volumes, with the impact of the Middle East conflict predicted to cool consumer appetite in subsequent periods.

Reporting by Paul McBeth. Image from B-joy Abraham on Unsplash.