Persisting tensions between the U.S. and Iran have heightened market concerns over a potential escalation, placing global equity markets under pressure, although the technology sector has shown relative resilience. Substantial disruptions to transit through the Strait of Hormuz have driven oil prices higher for a fifth consecutive day, with Brent crude poised to record its largest weekly gain since the onset of the conflict. Concurrently, uncertainty in the Middle East has dampened the global economic outlook, leading to a decline in metal prices.
On Friday, April 24, U.S. stock futures were mixed, with Dow Jones futures edging lower while Nasdaq 100 futures advanced. European stocks opened mostly lower, and Asian indices closed with mixed results. The 10-year U.S. Treasury yield and the Bloomberg Dollar Spot Index were both on track for their first weekly gains in a month. Oil prices climbed, with Brent crude holding above $105 per barrel, while metals declined. Spot gold fell over 0.3%, dropping below $4,680 per ounce, and spot silver declined more than 1%. Base metals including copper, aluminum, tin, and nickel all registered losses.
Although recent risk premiums have moderated, investors remained cautious ahead of the weekend, with market sentiment hinging on whether the Iran situation escalates or is resolved through diplomatic channels. Traders are closely monitoring signals from both the U.S. and Iran, as well as shipping activity, to assess energy supply risks. Any disruption to transit through the Strait of Hormuz could drive oil prices higher and weigh on global growth.
In equity markets, the technology sector performed strongly, with Nasdaq 100 futures rising 0.5% following Intel's robust earnings forecast. As previously reported, Intel exceeded the upper end of its guidance for first-quarter revenue, gross margin, and earnings per share, marking the sixth consecutive quarter in which the company has surpassed financial expectations.
Fawad Razaqzada of Forex.com noted, "There is considerable uncertainty regarding the diplomatic relations between the two sides. More concerning is the continued ambiguity surrounding the situation in the Strait of Hormuz. With no clear plan for reopening, uncertainty remains elevated."
Key market movements included:
- Dow Jones futures down 0.07%, S&P 500 futures up 0.2%, and Nasdaq 100 futures up over 0.6%. - The Euro Stoxx 50 index opened 0.4% lower, Germany's DAX was flat at the open, the UK's FTSE 100 fell 0.5%, and France's CAC 40 declined 0.7%. - Japan's Nikkei 225 index closed 1% higher at 59,716.18, while the Topix index ended little changed at 3,716.59. South Korea's KOSPI also finished virtually unchanged at 6,475.63. - The NIFTY IT index fell 5.3%, on track for its lowest level since June 2023. - The 10-year U.S. Treasury yield was largely flat at 4.33%. - The Bloomberg Dollar Spot Index was little changed; the U.S. dollar fell 0.1% against the yen to 159.60. - Brent crude rose 1% to $106 per barrel; WTI crude advanced 0.5% to $96 per barrel. - Spot gold declined 0.3% to $4,681.92 per ounce. - Silver futures in New York fell 2.0% intraday to $74.42 per ounce; spot silver dropped 1.5% to $74.25.
Major U.S. stock indices closed slightly lower in the previous session, but Nasdaq 100 futures gained after Intel's better-than-expected sales forecast sent its shares soaring 20% in after-hours trading. The semiconductor sector extended its strength during the U.S. trading session, rising for the 17th consecutive day.
Despite heightened geopolitical risks amplifying market volatility, corporate earnings have demonstrated resilience. Bloomberg data shows that nearly 80% of S&P 500 companies that have reported quarterly results have exceeded profit expectations. Adam Hetts and Oliver Blackbourn of Janus Henderson noted that while market volatility has increased following the outbreak of conflict with Iran, financial markets have shown relative resilience.
Brent crude rose 0.5% to over $105.50 per barrel, after earlier paring a 1.9% gain. Giovanni Staunovo, an analyst at UBS Group AG in Zurich, stated, "As long as oil flows through the strait remain constrained, markets continue to tighten, and oil inventories keep declining, oil prices will be supported."
Uncertainty surrounding Iran has intensified concerns over global economic growth, weighing on base metals. London copper fell over 0.8%, aluminum declined more than 0.6%, and tin dropped 0.4%. Analysts at BMI, a unit of Fitch Solutions, commented in a report, "At present, we expect uncertain global economic prospects to temper optimism on the supply side."
In addition to base metals, precious metals also declined. Spot gold fell below $4,700 per ounce, while spot silver dropped more than 1% to below $75.
