Wall St wavers as Trump gives mixed Iran message

Stocks on Wall Street were mixed as financial stocks and software firms buoyed the blue-chip Dow Jones Industrial Average while semiconductor firms weighed on the tech-heavy Nasdaq Composite after US President Donald Trump talked up progress on peace talks while also threatening a large attack if a deal isn’t reached soon.

European stock markets were more upbeat and bonds rallied after US Federal Reserve chair Jerome Powell calmed some inflation fears, saying the Middle East conflict hadn’t driven expectations for price increases over the long-term.

Australian futures are pointing to a more positive day for the antipodes, potentially easing some of the 7.1% slide so far this month for New Zealand’s S&P/NZX 50 index, with ANZ’s monthly business survey due, while minutes the Reserve Bank of Australia’s last policy meeting and Chinese manufacturing gauges are also on the radar.

And KMD Brands is still in a trading halt pending its capital raising, with Forsyth Barr reportedly tapped to help with roping in retail investors after tepid institutional uptake, while Goodman Property Trust and Santana Minerals are holding special meetings today.

Tentative steps

The Polymarket prediction market is pricing in a 31% chance of a ceasefire in the Middle East by the end of April and Brent crude oil futures rose 2.2% to US$107.60 a barrel at 7am in Auckland as investors remain wary of the conflict dragging on.

US President Trump said his administration made great progress in negotiations with a new regime, while also threatening to destroy Iranian energy infrastructure if a deal isn’t reached. The prospect of military operations on the ground has investors uneasy about how long the conflict will drag out after reports that the White House was weighing options to seize Iranian uranium and oil.

Stocks on Wall Street were mixed, with the Dow up 0.3% in late trading, with Salesforce, American Express and insurer Travellers Cos leading the blue-chip index higher, while the Nasdaq was down 0.6%, as Nvidia and other semiconductor firms were broadly weaker.

Markets were more positive across the Atlantic, with the UK’s FTSE 100 index climbing 1.6%, Germany’s DAX gaining 1.2% and France’s CAC 40 advancing 0.9%.

Meanwhile, Fed chair Powell played down the long-term inflationary impacts of the Iran war so far, saying the central bank can continue to look through the oil shock, but won’t be able to sit on its hands if rising price expectations bed in over time.

The yield on 10-year US Treasurys fell 4 basis points to 4.35% at 7am, while the kiwi dollar fell to 57.16 US cents from 57.38 cents yesterday.  

“With further escalation of the conflict in the Middle East over the weekend, it was a case of markets opening the new week with a risk off tone, as has become the norm for a Monday,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “However, after cautious trading to start the week, risk sentiment improved somewhat overnight for whatever reason, as we’re struggling to see any positive developments regarding the conflict.”

A rough month

That broadly upbeat mood is set to carry through to the antipodes, with Australian futures pointing to a 0.8% gain for the resources-heavy S&P/ASX 200 index when trading opens across the Tasman, with aluminium prices surging to a four-year high over the weekend. Gold futures increased 1.2% to US$4,547 an ounce at 7am in Auckland.

The NZX50 is heading for its worst month since January 2022, although the defensive bourse has outperformed its peers so far through March.

The ANZ business outlook survey is due today, which BNZ’s Wong said will give an idea on how confidence has been knocked by the Middle East conflict.

Retailer KMD remains in focus as it works through settling terms on a planned capital raising, which prompted a protracted trading halt and delay to its first-half result. The Australian’s Dataroom column today reported Forsyth Barr has been tapped to attract retail investors to the raising.

Meanwhile, Goodman Property unitholders will vote on approving a corporatisation of the commercial landlord and adoption of a stapled securities structure, while Santana shareholders will be asked to approve a placement at their respective special meetings today.

Reporting by Paul McBeth. Image from Sophie Backes on Unsplash.