Stocks slip, oil climbs as US-Iran truce expiry looms
Oil prices climbed and stocks slid Tuesday as uncertainty reigned over US-Iranian peace talks resuming and the expiration of the two-week ceasefire in the Middle East loomed.
Investors had been hoping that despite hostile rhetoric there was scope for a deal to end the Middle East war and reopen the vital Strait of Hormuz to oil and gas shipments.
But Iran has not yet sent a delegation to neighbouring Pakistan for a new round of peace talks with the United States, even as the two-week ceasefire was set to expire by Wednesday.
A US delegation led by Vice President JD Vance was expected to leave shortly from Washington for Islamabad, which earlier this month hosted a first round of talks, which ended without a deal. However, there was no confirmation of Vance's departure.
Brent North Sea crude, the international benchmark, was up 1.6 percent at around $97 per barrel, having surged the previous day after Iran reclosed the Strait of Hormuz.
Wall Street's main stock indices rose as trading got underway in New York but then dipped lower.
Europe's main equity markets finished the day down, with both London and Paris shedding more than one percent. Asian markets closed higher.
"Investor sentiment remained cautious due to uncertainty around the Iran ceasefire," said market analyst Axel Rudolph at investing and trading platform IG.
Despite the uncertainty, investors aren't anticipating the worst either.
"Oil prices remained below $100 a barrel which suggests cautious optimism that the Middle East conflict won't intensify," said Russ Mould, investment director at AJ Bell.
"However, the longer oil remains in the 90s (dollar per barrel) range... the higher the chance of an inflationary shock and a wobble to global economic activity," he said.
Sentiment on Wall Street had been bolstered earlier in the day by data showing better-than-expected March retail sales even as energy prices began to hit consumers.
While the spike in fuel prices has raised concerns it will weigh on consumer spending, a key component of US economic growth, data showed that March retail sales still rose 0.6 percent month-on-month when excluding gasoline sales.
Bret Kenwell, US investment analyst at eToro, said the data "echoes what we heard from the big banks last week, with management teams largely pointing to a resilient consumer despite soaring gas prices and a barrage of geopolitically charged headlines".
With US stocks having recovered from pre-war losses and sitting near record highs, Kenwell said that might not only reflect hopes for further de-escalation in the Middle East, but "may also signal growing optimism around earnings".
If US companies continue to post solid first-quarter earnings, "it could reinforce investors' confidence that this rally still has room to run", he added.
Investors were also following the confirmation hearings for Kevin Warsh, Trump's choice to lead the Federal Reserve, for indications on the direction of US interest rates in the coming months, as the world's largest economy faces inflation risks and headwinds to growth.
- Key figures around 1530 GMT -
Brent North Sea Crude: UP 1.6 percent at $97.04 a barrel
West Texas Intermediate: UP 1.7 percent at $88.92 a barrel
New York - Dow Jones: DOWN 0.2 percent at 49,353.05 points
New York - S&P 500: DOWN 0.3 percent at 7,091.12
New York - Nasdaq Composite: DOWN less than 0.1 percent at 24,384.97
London - FTSE 100: DOWN 1.1 percent at 10,498.09 (close)
Paris - CAC 40: DOWN 1.1 percent at 8,235.72 (close)
Frankfurt - DAX: DOWN 0.6 percent at 24,270.87 (close)
Tokyo - Nikkei 225: UP 0.9 percent at 59,349.17 (close)
Hong Kong - Hang Seng Index: UP 0.5 percent at 26,487.48 (close)
Shanghai - Composite: UP 0.1 percent at 4,085.08 (close)
Euro/dollar: DOWN at $1.1747 from $1.1786 on Monday
Pound/dollar: DOWN at $1.3505 from $1.3535
Dollar/yen: UP at 159.43 yen from 158.88 yen
Euro/pound: DOWN at 86.97 pence from 87.07 pence
burs-rl/jhb
C.Bell--TNT
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