Wall Street slows decline as Trump pauses Iran strike
Elon Musk lost his challenge to OpenAI’s profit plans.
Stocks on Wall Street slowed their decline after US President Donald Trump paused a planned strike on Iran to give peace another chance, with ongoing tensions in the Middle East continuing to keep investors on edge and pushing oil prices higher.
Semiconductor firms and chipmakers were broadly weaker in the downbeat mood, with Nvidia one of the major drags on the Dow Jones Industrial Average, even as a Californian jury tossed out Elon Musk’s claims against OpenAI, paving the way for the artificial intelligence giant to go public later this year.
The NZX is expected to have a cautious start to the trading day after Wall Street’s tentative lead, with a pause in the latest earnings season and Statistics New Zealand due to release producer prices for the March quarter and April spending on credit and debit cards.
And New Zealand’s finance minister Nicola Willis is expected to signal plans to shrink the public service in her latest pre-budget speech, with The Post tipping she will reiterate the need for fiscal discipline at a time when bond yields have been on the rise.
Another pause
Brent crude oil futures rose 0.4% to US$109.63 a barrel at 7.30am in Auckland, paring earlier gains after US President Trump said he was asked to hold off from an attack on Iran to allow serious negotiations with Iran, which had responded to the latest peace proposal from the world’s biggest economy.
That slowed the decline on Wall Street, with the Dow marginally higher in late trading as gains for 3M, Salesforce and Chevron helped offset weakness in Caterpillar, Nvidia and Apple.
The Polymarket prediction market was pricing in a 14% chance of a permanent peace deal between the US and Iran by the end of the month, and a 33% chance by the end of June.
The S&P 500 was down 0.5% and the Nasdaq Composite dropped 1% in the downbeat trading session, parting ways with Europe where stock markets bounced from their Friday declines. The UK’s FTSE 100 advanced 1.3%, Germany’s DAX gained 1.5% and France’s CAC 40 increased 0.4%.
Rotations
Moomoo market strategy consultant Greg Boland said tech stocks drove the weakness on Wall Street, with investors preferring the energy, financials and consumer staples sector. Utilities Dominion Energy jumped 9.4% on a proposed US$67 billion takeover by NextEra Energy.
“The New Zealand market is expected to open cautiously today after another weak session on Wall Street as rising global bond yields, and continued geopolitical tensions in the Middle East pressured global risk sentiment,” Boland said in a note.
The yield on US 10-year Treasuries eased 3 basis points to 4.6%, while New Zealand’s equivalent was at 4.83%, its highest level since late March.
New Zealand’s S&P/NZX 50 index extended its decline for a fifth day on Monday, while Australian futures are pointing to a 0.8% gain for the S&P/ASX 200 index when trading opens across the Tasman.
The kiwi dollar rose to 58.72 US cents at 7.30am from 58.37 cents yesterday.
No domestic earnings are scheduled on the NZX today, while Stats NZ will release business prices figures for the March quarter and electronic card spending for April.
Meanwhile, NZ finance minister Willis is poised to deliver a pre-budget speech, where she’s expected to announce a reform of the public service, shrinking the number of agencies and cutting public service jobs in a push for the departments to digitise and adopt AI.
Reporting by Paul McBeth. Image from Jonathan Ardila on Unsplash.
