Markets Overview
- ASX SPI 200 futures down 1.7% to 8,744.00
- S&P 500 down 0.4% to 7,337.11
- Dow Average down 0.6% to 49,596.97
- Aussie down 0.4% to 0.7206 per US$
- US 10-year yield rose 3.5bps to 4.3840%
- Australia 3-year bond yield fell 2.8 bps to 4.60%
- Australia 10-year bond yield fell 3 bps to 4.92%
- Gold spot little changed at $4,688.86
- Brent futures up 1.8% to $103.13/bbl
Economic Events
- 11:00: (AU) Australia to Sell A$1 Billion 1.25% 2032 Bonds on May 8
US stock-index futures fell and oil rose as escalating conflict in the Middle East rattled investors and revived concerns about energy supplies.
Contracts on the S&P 500 Index and the tech-heavy Nasdaq 100 declined 0.2% after the underlying gauges eased from their record highs on Thursday following clashes between the US and Iran. Asian equities were also set to edge lower from an all-time high close.
West Texas Intermediate jumped 2.5% in early Asian trading to about $97.20 a barrel on concerns the Middle East crisis will prolong the closure of the key Strait of Hormuz. The dollar strengthened on Thursday and the 10-year Treasury yield climbed four basis points as the outlook for a deal to end the 10-week war worsened.
American forces responded to Iranian attacks on Navy destroyers as they were sailing in the Strait of Hormuz on Thursday, US Central Command said. President Donald Trump threatened Iran and said the US will “knock them out a lot harder, and a lot more violently, in the future, if they don’t get their Deal signed, FAST!”
The shift marked a sharp reversal in risk appetite after global equities hit a record earlier this week, underscoring how quickly geopolitical shocks can upend the narrative. Traders are now bracing for further retaliation and monitoring potential disruptions to energy flows, with crude oil prices likely to remain volatile in the days ahead.
“In that environment where you basically don’t know if there’s going to be a deal or not — very difficult to predict with this new leadership in Iran — you know you’re going to be subject to news and you’re going to be moving around like crazy,” Citigroup Inc.’s Max Layton told Bloomberg Television.
The US is looking to restart the initiative to guide stranded ships through Hormuz that it had paused earlier this week, the Wall Street Journal reported. The plan, which Trump dubbed “Project Freedom,” had resulted in clashes with Iran and missiles fired at the United Arab Emirates.
Washington is waiting on Tehran to respond to its proposal to reopen the strait, with tensions still high in both the Persian Gulf and in Lebanon. An Iranian official said the nation wouldn’t allow a reopening with “an unrealistic plan,” the Wall Street Journal reported, citing Press TV.
Elsewhere, Trump’s 10% global tariffs were declared unlawful by a federal trade court in a fresh blow to the administration’s economic agenda in the latest setback for the president’s effort to levy tariffs without input from Congress.
The S&P 500 Index fell 0.4% on Thursday, with nine of 11 sectors declining, led by materials and energy. The Nasdaq 100 Index dropped 0.1%.
Stocks set all-time closing highs the past two days. On Wednesday, solid results from chipmaker Advanced Micro Devices Inc. helped drive the gains, building on strength from megacap tech firms such as Alphabet Inc. earlier in the earnings cycle.
“Everyone’s primed to see things de-escalate” between Iran and the US, GuideStone portfolio manager Josh Chastant said.
On the economic front, initial jobless claims rebounded slightly after falling in the previous week to near the lowest levels in decades, signaling layoffs remain muted. Friday’s jobs reading is expected to show the first back-to-back monthly increases in payrolls in almost a year.
