Staff reporters
Financial markets calmed in the wait to see what will come next and after President Donald Trump raised doubts about the temporary truce in the Iran war. The local sharemarket is likely to do the same when it opens on Friday.
Futures, at 6am AEST, are pointing to a flat opening, with the key S&P/ASX 200 index on Friday set to rise a slight 3 points, or 0.03 per cent. The dollar was trading for US69.38ยข, the same rate as the day before.
Stocks rose, and oil prices eased on Thursday on most exchanges in Europe, the US and Asia, but fell for a fourth straight session on the local bourse.
Oil prices gave back much of their jumps from the day before. The price for a barrel of Brent crude, the international standard, fell 2.2 per cent to $US76.30. Thatโs down from $US78.02 the day before though still above its $US71.80 price from the end of last week.
The worry is that a return to full-blown war will block oil tankers from the Strait of Hormuz and prevent the delivery of crude from the Persian Gulf to customers worldwide. That could worsen inflation, which economists expected would ease with oil prices, and in turn force the Federal Reserve and other central banks to raise interest rates.
Higher rates can keep a lid on inflation, but they also slow the economy and hurt prices for all kinds of investments.
But Trump also said Wednesday that the latest back-and-forth fighting would not result in โlong-termโ military action, raising uncertainty about just what will happen.
The swings for oil prices halted what had been a steady decline in gasoline prices in the US, and the cost for a gallon climbed a nickel overnight, according to motor club AAA. The average price for a gallon of regular gasoline was $US3.85 Thursday, up 68ยข from a year earlier.
In the meantime, renewed strength for makers of computer chips and other winners of the boom around artificial-intelligence technology is helping to support stock markets worldwide.
In South Korea, whose stock market is dominated by two companies that make semiconductors, the Kospi index rose 0.6 per cent after tumbling 5.3 per cent the day before. SK Hynix, which is preparing to sell shares of its stock that will trade in the United States, jumped 5.3 per cent in Seoul.
On Wall Street, the S&P 500 climbed 0.8 per cent, more than recovered its loss from the day before. The Dow Jones Industrial Average added 0.3 per cent, and the Nasdaq composite rose 1.3 per cent.
Broadcomโs 4 per cent rise was the strongest force pushing upward on the S&P 500.
Close behind was Micron Technologyโs climb of 6.3 per cent. Micron cited โsurging demand for memory in the AI eraโ as it gave a progress update on construction in central New York of what it says is the largest semiconductor manufacturing site in US.history.
Such shares have become some of Wall Streetโs most influential after growing so big in the euphoria around AI. But AI stocks have also come under pressure recently because of worries their prices shot too high and that AI may not create enough productivity and profits to make all the investments in chips and data centres worth it.
Shares broadly got some help from falling yields in the bond market. The yield on the 10-year Treasury fell to 4.53 per cent from 4.56 per cent late on Wednesday.
It had been climbing on worries about high oil prices and the potential for higher interest rates, which cranked up the pressure on stocks and prices for other investments.
Besides the war with Iran, another big event for Wall Street is the upcoming start of earnings reporting season for companies. Next week, the biggest banks are set to unveil how much profit they made from April through June. Companies across industries will need to report strong growth to justify the big moves their share prices have made.
In sharemarkets abroad, indexes rose across much of Europe and Asia. Besides Seoulโs climb, stock indexes rose 1.7 per cent in Shanghai and 0.9 per cent in Paris. On the losing end was Hong Kongโs Hang Seng, which slipped 0.7 per cent as shares of Apple supplier Luxshare fell 1.5 per cent in its trading debut.
From our partners
About the Author
