By Mike Dolan
April 30 (Reuters) - What matters in U.S. and global markets today
By Mike Dolan, Editor-at-Large, Finance and Markets
Try as they might, it’s impossible for markets to ignore the renewed surge in oil prices on the Iran war stasis. Global crude prices surged to their highest level since the war began amid reports that Washington was considering a resumption of military action to break the deadlock.
On the last day of the June Brent futures contract, the price hit four-year highs of around
$126 per barrel, while the new July benchmark surged to almost $115/bbl before easing back. The fuel price squeeze was the backdrop for the Fed’s distinctly hawkish hold on Wednesday.
I’ll get into that and more below.
But first, check out my latest column on the signs that U.S. inflation is heading higher.
And listen to the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
OIL FEAR SHROUDS TECH SPLURGE
The Fed left rates unchanged on Wednesday, but three regional presidents voted to remove references to an “easing bias” in the central bank statement. Outgoing Chair Jerome Powell also surprised many by saying he’d stay on as a board member - at least for a time - after his chairmanship ends next month.
Powell’s term on the board will last until early 2028, meaning there will be no immediate vacancy on the board for President Trump to fill.
Futures markets have wiped out all bets on Fed easing this year, with a one-in-three chance of a rate hike by next April. Treasury yields are climbing again, with the 30-year yield briefly topping 5% for the first time since September. The dollar jumped briefly, but was knocked back below 160 yen by Japanese intervention worries.
The European Central Bank and Bank of England will issue their rate decisions today. Like the Fed and Bank of Japan, they’re both expected to keep policy on hold but warn of oil-related inflationary pressure.
Meantime, the mega-cap earnings season swept in after Wednesday’s bell. Alphabet surged more than 6% on its beat and impressive cloud business, while Meta went the other way, dropping more than 6% as investors fretted about its latest capex boost.
The share price reactions to Amazon and Microsoft’s results were more subdued, but overall, there was no major red or green flag on the gigantic AI buildout. Spending from the so-called hyperscalers this year is now expected to top $700 billion overall.
Whether that high and rising bill is justified or not remains to be seen, but it means the underlying demand for AI chips and equipment will go up another gear for now while the end game for the massive capex continues to be assessed.
Finally, Asian shares fell on oil's renewed surge on Thursday, while European shares opened lower and Wall Street futures were mixed before the bell.
Chart of the day
South Korean tech giant Samsung Electronics reported record quarterly profit driven by a 49-fold jump in chip income, saying it expects a severe supply shortage to deepen next year as clients spend on AI. The results come a day after updates from U.S. mega-caps Microsoft, Alphabet, Amazon and Meta indicated that 2026 capex plans now top $700 billion.
Today's events to watch
* U.S. March PCE inflation data (8:30 a.m. EDT), weekly jobless claims (8:30 a.m. EDT)
* U.S. corporate earnings: Apple
* Bank of England rate decision (7 a.m. EDT) and European Central Bank rate decision (8:15 a.m. EDT)
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(By Mike Dolan)
