NEW YORK/ LONDON: Oil futures rose on Monday as energy supplies were tight, with U.S.-Iran peace talks stalled while Wall Street equity indexes inched down as investors looked cautiously ahead to a busy week of megacap earnings reports, economic data, and central bank decisions.
While a ceasefire has paused fighting in the war triggered by U.S.-Israeli strikes on Iran two months ago, shipping through the Strait of Hormuz was still extremely limited, which pushed Brent futures to their highest levels in nearly three weeks.
The outlook for Middle East talks remained uncertain after U.S. President Donald Trump called off a weekend trip by his envoys and said Iran should phone when it wanted a deal. But sources from mediator Pakistan said efforts to bridge gaps between the U.S. and Iran continued.
While worrying about the war, investors also waited with bated breath for economic data and earnings reports, according to Phil Blancato, chief market strategist at Osaic Wealth in New York. This week’s data will include first-quarter U.S. economic growth and the March Personal Consumption Expenditures Price Index, which is the Federal Reserve’s preferred gauge for inflation.
“We’re in this holding-on moment here. I don’t think the market’s going to grind a lot higher,” said Blancato. “The market is trying to hold on to its gains, waiting for more information to support where we’ve gone so far this year.”
Capital expenditure plans will be a key focus for firms such as Microsoft (MSFT.O), Alphabet (GOOGL.O), Amazon (AMZN.O), and Meta Platforms (META.O), when they report quarterly results on Wednesday, while Apple (AAPL.O), is scheduled to release results a day later.
On Wall Street at 11:04 a.m. ET (1504 GMT), the Dow Jones Industrial Average (.DJI), fell 152.37 points, or 0.31%, to 49,079.18, the S&P 500 (.SPX), fell 12.12 points, or 0.17%, to 7,153.03, and the Nasdaq Composite (.IXIC), fell 88.59 points, or 0.35%, to 24,748.79.
MSCI’s gauge of stocks across the globe (.MIWD00000PUS) rose 0.66 points, or 0.06%, to 1,072.86, while the pan-European STOXX 600 (.STOXX), index fell 0.38%.
INTEREST RATES AND TECH EARNINGS
In currencies, the U.S. dollar slipped on Monday as investors were on edge about the Middle East and a slate of central bank meetings later this week. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.26% to 98.38, with the euro up 0.11% at $1.1733. Against the Japanese yen , the dollar weakened 0.08% to 159.24.
Major central banks are expected to keep policy on hold this week, including the U.S. Federal Reserve. The Fed’s meeting, which runs Tuesday through Wednesday, will likely be the last with Jerome Powell as Chair.
The first central bank to meet will be the Bank of Japan, which is expected on Tuesday to keep its short-term policy rate steady at 0.75% while the European Central Bank and Bank of England are expected to keep policy unchanged.
In the bond market, U.S. Treasuries sold off ahead of a wave of issuance on the front end of the curve that is expected to once again test demand for the country’s government debt.
The yield on benchmark U.S. 10-year notes rose 2.3 basis points to4.334%, from 4.31% late on Friday while the 30-year bond yield rose 2.5 basis points to4.9409%.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.8 basis points to3.804%.
In energy, U.S. crude oil rose 2.85% to $97.05 a barrel and Brent oil rose to $108.75 per barrel, up 3.29% on the day.
In precious metals, gold eased as high oil prices fanned inflation concerns.
Spot gold fell 0.88% to $4,667.24 an ounce. U.S. gold futures fell 0.61% to $4,693.40 an ounce.