Wall St stumbles as Trump puts heat on US, Iran peace talks

Stocks on Wall Street eased from their recent records as oil prices stepped higher ahead of peace talks between the US and Iran, with President Donald Trump ratcheting up the pressure on securing a deal, saying he’s highly unlikely to extend the current ceasefire.

The major energy companies including Exxon Mobil, BP and Shell followed Brent crude prices higher while airlines were off the boil, setting a soft lead for the likes of Air New Zealand and Qantas Airways.

The subdued tone isn’t spilling over to the antipodes yet, with Australian futures pointing to a positive start to the day for the ASX, while Statistics New Zealand’s March inflation report and the NZ Institute of Economic Research’s quarterly business confidence survey are in view as investors try to gauge the pace and timing of the Reserve Bank’s rate hike cycle.

And NZ prime minister Christopher Luxon will face his National party caucus today after rumblings of discontent within the governing coalition’s major partner over its soft polling.

More talking

Stocks in Europe and the US pulled back from their latest rally as US vice president JD Vance leads a delegation to resume peace talks with Iran after the opening and swift re-closure of the Strait of Hormuz over the weekend.

Optimism that a deal will be reached remains intact, with the Polymarket prediction market pricing in 56% chance of a lasting peace between the US and Iran by the end of May and a 70% chance by the end of June.

Still, President Trump told Bloomberg he’s highly unlikely to extend the current ceasefire if a deal isn’t reached, and the volatility index, known as Wall Street’s fear gauge, jumped 8.9% to 19.04 while Brent crude oil futures were up 5.7% at US$95.51 a barrel at 7am in Auckland.

“This week looks to be pivotal, and the market is likely to be in a wait-and-see mode until we hear more in coming days,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “While Trump’s nonchalance over timing to resolve the conflict might well be a strategy to achieve a quick deal, further significant delay in the reopening of the Strait of Hormuz would have grave consequences for the economic outlook and it is difficult to see market optimism sustaining under that scenario.”

The Dow Jones Industrial Average dipped 0.1% in late trading, while the tech-heavy Nasdaq Composite and the S&P 500 were both down 0.3%. Across the Atlantic, the UK’s FTSE 100 slipped 0.6%, Germany’s DAX dropped 1.2% and France’s CAC 40 slid 1.1%.

Big earnings to come

Tesla is the first of the Magnificent 7 megacap stocks to post earnings in the current season when it reports on Wednesday in the US. The Roundhill Magnificent Seven exchange traded fund was down 1.1% in late trading in the US.

Australian futures are pointing to a 0.1% gain for the resources-heavy S&P/ASX 200 index when trading opens across the Tasman. New Zealand’s S&P/NZX 50 index edged higher on Monday, with blue chips Meridian Energy and Infratil buoying the benchmark.

The kiwi dollar traded at 58.89 US cents at 7am from 58.78 cents yesterday.

Local data today include Stats NZ’s March quarter consumers price index, which is expected to show the annual pace of inflation at 2.9%, while the NZIER’s quarterly survey of business opinion will likely show dwindling sentiment among firms.

New Zealand prime minister Christopher Luxon will face his National party MPs at their caucus meeting today amid reports that he’s losing their support. The Kalshi prediction market is pricing in a 55% chance that Luxon will leave office this year in a thinly traded contract.

Summerset Group Holdings is holding its annual meeting in Wellington today, while Comvita’s rights to participate in its $30 million capital raising begin trading on the NZX today.

And MediaWorks is said to be in play, with the Australian Financial Review's Street Talk column reporting Quadrant has hired Jarden to find a buyer for the commercial radio network.

Reporting by Paul McBeth. Image from Nils Huenerfuerst on Unsplash.