U.S. Stock Market indexes are set for topsy turvy trading on Wednesday as futures of key indexes were down in the pre-market hours. S&P futures were down by 0.11 per cent, Dow futures fell 0.18 per cent, and Nasdaq futures slipped 0.03 per cent.
Dow Jones Industrial Average fell 322.24 points, or 0.65 per cent, to 49,363.88, the S&P 500 fell 49.44 points, or 0.67 per cent, to 7,353.61 and the Nasdaq Composite fell 220.02 points, or 0.84 per cent, to 25,870.71.
International Oil Prices
Oil prices eased on Wednesday after U.S. President Donald Trump again asserted the war with Iran will end “very quickly”, though investors remain wary about the outcome of peace talks amid continued disruptions to Middle East supply from the conflict. Brent crude oil futures fell 45 cents, or 0.4 per cent, to $110.83 a barrel, while U.S. West Texas Intermediate futures were down 27 cents, or 0.3 per cent, to $103.88.
Both benchmarks fell nearly $1 on Tuesday.
Gold, Silver Prices
Gold prices edged higher as optimism over a potential peace agreement between the United States and Iran tempered concerns around inflation and interest rates staying higher for longer. Spot gold rose 0.4 per cent to $4,499.69 per ounce. It had hit its lowest level since March 30 in the previous session. U.S. gold futures for June delivery lost 0.2 per cent to $4,502.30.
Spot silver rose 1 per cent to $74.55 per ounce, platinum gained 0.2 per cent to $1,926.70, and palladium rose 0.9 per cent to $1,365.50.
Global Stocks
A global stock index fell. MSCI’s gauge of stocks across the globe fell 6.44 points, or 0.59 per cent, to 1,091.79. European stocks were higher, however, further recovering ground lost on Friday when they dropped 1.5 per cent as bond market jitters spread to equities. Stocks in Europe, which is a net importer of energy and has fewer major tech firms, remain below pre-war levels and have lagged far behind their U.S. peers. The pan-European STOXX 600 index rose 0.19 per cent.
U.S. Treasury yields
Mounting inflation fears continued to drive up U.S. Treasury yields. The 30-year Treasury bond’s yield hit its highest in 19 years. It was last at around 5.18 per cent. U.S. 10-year yields rose to their highest levels in more than a year.
Investors are closely watching rising yields, said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “We’re seeing the long end of the market continues to rise,” he said. “That is the reason why we’re seeing (stocks) on the defensive.”
Rising yields push up borrowing costs and mean a higher discount for future company earnings, challenging stock valuations. The all-important AI trade will be tested by earnings from chipmaker Nvidia due on Wednesday, with expectations sky-high for the world’s most valuable company. Results from Walmart and other retailers are also still to come this week.
