Stan Choe
Hopes for a possible end to the war with Iran are pushing stocks higher again on Wall Street Wednesday, while oil prices ease.
The S&P 500 rose 0.7 per cent in its latest flip-flop after the United States delivered a plan to pause the war to Iran. The Dow Jones Industrial Average was up 360 points, or 0.8 per cent, and the Nasdaq composite was 1 per cent higher. The Australian sharemarket is set to rise, with futures at 4.57am AEDT pointing to a gain of 30 points, or 0.4 per cent, at the open. The ASX bounced 1.9 per cent higher on Wednesday. The Australian dollar was weaker ant US69.62ยข at 5.14am AEDT.
But the moves are shaky, and the S&P 500 during the morning briefly came close to erasing all of an early 1.2 per cent jump. Financial markets have swung sharply since the war began more than three weeks ago, and many of the reversals have struck hour to hour as uncertainty continues to dominate about how long the war will last.
Keeping up that uncertainty on Wednesday: Iran dismissed the US governmentโs 15-point proposal for a ceasefire, and Iranian state television quoted an anonymous official as saying โIran will end the war when it decides to do so and when its own conditions are met.โ
Iran also launched more attacks on Israel and Gulf Arab countries, including an assault that sparked a huge fire at Kuwait International Airport, while coming under attack itself. The US military is deploying paratroopers and more Marines to the region.
Optimism, though, was nevertheless evident in financial markets worldwide. Stock indexes climbed more than 1 per cent in London, Paris and Shanghai. Tokyoโs Nikkei 225 leaped 2.9 per cent.
The price for a barrel of Brent crude fell 3.5 per cent and dropped toward $US96 on hopes that a cooldown in fighting could allow oil and natural gas to flow more freely from the Persian Gulf to customers around the world. Many oil tankers are currently stuck outside the Strait of Hormuz off Iranโs coast, and the blockage has sent Brent crude to nearly $US120 per barrel at times.
In the bond market, Treasury yields also eased. That could help soften the rise in rates for mortgages and other kinds of borrowing since the beginning of the war. That in turn could lessen the pressure on the economy.
The yield on the 10-year Treasury fell to 4.32 per cent from 4.39 per cent late Tuesday, though it remains well above its 3.97 per cent level from just before the war.
Even gold, which has been one of the investment worldโs worst losers through the war, rose. It climbed 3.5 per cent to top $US4550 per ounce.
Goldโs price had briefly gotten near $US5400 early this month. That was before Treasury yields rushed higher on worries that high oil prices would drive inflation upward and prevent the Federal Reserve from cutting interest rates. When bonds are paying more in interest, they make gold, which pays its investors nothing, less attractive in comparison.
On Wall Street, Arm Holdings soared 18.2 per cent after the UK giant announced a suite of chips for data centres and artificial-intelligence technology.
Robinhood Markets leaped 5.3 per cent to help lead US stocks after its board authorised a program to send up to $US1.5 billion ($2.2 billion) to shareholders by buying back the companyโs stock.
Terns Pharmaceuticals rose 5.6 per cent after Merck said it would buy the oncology company in an all-cash deal valuing it at $US6.7 billion. Merck rose 2.6 per cent.
On the losing end of Wall Street was On Holding. The Swiss company that sells On shoes slumped 11 per cent after saying its CEO, Martin Hoffmann, is stepping down.
In Hong Kong, Pop Mart International Group tumbled 22.5 per cent after the company behind the popular Labubu dolls reported explosive growth in profit and revenue, but not enough to meet analystsโ expectations.
AP
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