Wall St pares losses on prospect of Hormuz strait traffic deal
US President Trump’s stance on Iran left markets on edge.
Stocks on Wall Street pared earlier losses and Brent crude oil prices slowed their ascent amid reports that Iran is working with Oman to monitor traffic through the Strait of Hormuz, easing some earlier nervousness over US President Donald Trump’s address to the nation that failed to articulate a definitive end to the Middle East conflict.
Investor sentiment soured in the wake of Trump’s speech having built up expectations that the military operation would be coming to an end, although traders on the Polymarket prediction market were more circumspect and the odds of a ceasefire this month have lengthened.
The UK’s FTSE 100 was one of the few markets to advance on Thursday – like New Zealand’s S&P/NZX 50 index – with BP among the gainers buoying the index as energy majors rallied on the rising oil price.
Meanwhile, the kiwi dollar was largely unchanged against the greenback and dipped against the Aussie, with New Zealand’s NZX and Australia’s ASX closed for the Good Friday holiday.
Mixed messages
Brent crude oil futures rose 7.7% to US$107.96 a barrel at 7am in Auckland, paring earlier gains as reports that Iran is working on a protocol with Oman to monitor traffic through the Strait of Hormuz raised a flicker of hope that the constraint on energy supplies might start easing as the Middle East conflict drags on.
Earlier hopes that Trump was preparing to pull out of his military operation in Iran were dashed during his address to the nation on Wednesday night in Washington, with the US leader ratcheting up the rhetoric by saying he would hit the Islamic Republic “extremely hard” in the coming weeks and that his objectives would be achieved very shortly.
Pricing on the Polymarket prediction market puts the chance of a ceasefire by the end of April at 24%.
Stocks on Wall Street followed Asia lower, with the S&P 500 down 0.2% in late trading and the Nasdaq Composite dipping 0.4%, paring steeper losses on the protocol reports. The Dow Jones Industrial Average fell 0.4% in late trading, with Sherwin-Williams and Home Depot leading the blue-chip index lower.
Big oil
Energy majors including Exxon Mobil and Chevron followed oil prices, and were among the top 10 US securities traded by local platform operator Sharesies’ almost 1 million users.
Other US stocks attracting attention from local investors included Firefly Aerospace, Berkshire Hathaway and Magnificent 7 members Nvidia, Alphabet and Tesla – the last of which dropped 5.5% after sales growth in its latest quarter fell short of expectations.
European markets were similarly rocked, with Germany’s DAX down 0.6% and France’s CAC 40 declining 0.2%.
The UK’s FTSE 100 bucked the trend, gaining 0.7%, as foreign ministers from more than 40 nations met in London to prepare for next week’s talks on the future of the Strait of Hormuz once the Middle East conflict ends.
The kiwi dollar traded at 57.19 US cents at 7am in Auckland from 57.14 cents yesterday and fell to 82.81 Australian cents from 83.01 cents.
New Zealand’s Reserve Bank is expected to keep the official cash rate at 2.25% when it reviews monetary policy on Wednesday next week, with local economists predicting the central bank won’t start raising the benchmark rate until the end of the year.
Australasian markets are closed on Friday and Monday for the long Easter weekend, while Wall Street is closed on Good Friday and reopens on Easter Monday.
