New York, Apr 9 (AP) Oil prices are climbing back toward USD 100 per barrel on Thursday, while stock markets worldwide slow following their big gains from the day before.
The S&P 500 slipped 0.1 per cent as the United States, Iran and Israel disagreed on the details of their two-week ceasefire, whose announcement had sent markets flying in optimism on Wednesday.
The Dow Jones Industrial Average was down 40 points, or 0.1 per cent, as of 10 am Eastern time, and the Nasdaq composite was 0.2 per cent lower.
The oil market was jumpier, and the price for a barrel of benchmark US crude oil climbed 6.8 per cent to USD 100.79.
It rose after semiofficial news agencies in Iran suggested forces have mined the Strait of Hormuz, the narrow waterway that has
been at the centre of President Donald Trump’s demands of Iran. Blockages there have kept oil and natural gas stuck in the Persian Gulf, away from customers worldwide.
Brent crude, the international standard, rose 3.7 per cent to USD 98.24 per barrel. It’s well below the USD 119 level that it briefly reached when worries about the war reached their height, but it’s still well above its roughly USD 70 level from before the war.
Given how far apart the United States and Iran seem to be in their demands, upward pressure on oil prices may be “here to stay for a while” according to strategists at Macquarie led by Thierry Wizman.
Risks remain for renewed fighting, which could cause customers worldwide to hoard whatever oil supplies they do get. That could itself keep oil off the market, much like actual fighting targeting pipelines or oil tankers.
On Wall Street, Simply Good Foods tumbled 15.1 per cent after the company behind the Quest and Atkins brands reported a worse drop in revenue than analysts expected.
CEO Joe Scalzo called the results unsatisfactory and said the company is making immediate changes to turn around its performance.
Constellation Brands rallied 5.3 per cent for one of the market’s bigger gains after reporting stronger results for the latest quarter than analysts expected. The company, which sells Modelo beer and Robert Mondavi wines, said it saw encouraging trends heading into its new fiscal year. But given “limited near-term visibility,” it pulled its financial forecasts for the following fiscal year.
A suite of mixed reports on the US economy also helped to keep Wall Street in check. One said an underlying measure of inflation that the Federal Reserve considers important was slightly hotter in February than economists expected. It decelerated before the war with Iran began, but not by as much as economists expected.
A separate report said that more US workers applied for unemployment benefits last week than economists expected. The number was not very high compared with history, but it could indicate an acceleration in layoffs.
Treasury yields swiveled up and down in the bond market following the reports before ticking higher.
The yield on the 10-year Treasury rose to 4.31 per cent from 4.29 per cent late Wednesday. Its leap from 3.97 per cent before the war began has sent rates up for mortgages and other kinds of loans going to US households and businesses.
If oil prices stay high and keep upward pressure on inflation, the Federal Reserve would have difficulty resuming its cuts to interest rates to help the slowing economy, even if the job market weakens. A growing number of Fed officials seem to be considering the possibility of a hike in rates, according to minutes of their latest meeting released on Wednesday.
In stock markets abroad, South Korea’s Kospi fell 1.6 per cent, and Germany’s DAX lost 1.4 per cent for two of the world’s biggest moves. (AP) GSP
/images/ppid_a911dc6a-image-177593002715353609.webp)
