BANGKOK (AP) – On Friday, global stock markets presented a mixed performance amid diminishing optimism regarding the U.S.-Iran agreement aimed at ending their ongoing conflict. The situation was complicated by the postponement of crucial discussions tailored to restart negotiations surrounding Iran's nuclear program and to facilitate oil transportation through the Strait of Hormuz.
U.S. markets faced closure on Friday in observance of Juneteenth.
High-stakes negotiations planned in Switzerland between Iran and the United States, which were intended to establish a lasting peace, were delayed. Concurrently, tensions continued to rise, with Israel's military reporting strikes on targets throughout southern Lebanon. Hezbollah responded with accounts of intense fighting in that area.
Commenting on the fragile situation, Bas van Geffen from RaboResearch noted, “Both sides are trying to show some good faith. But even if the water appears calmer, there is still a strong undertow. The agreement remains fragile on multiple fronts.”
Meanwhile, early trading in Europe saw Germany's DAX index rise by 0.4% to 25,129.38, with France's CAC 40 also climbing 0.4% to 8,499.08. Britain’s FTSE 100 edged up slightly, approximately 0.1%, closing at 10,406.28.
In contrast, U.S. futures indicated a decline, with the S&P 500 future dropping by 0.2%, and the Dow Jones Industrial Average future slipping less than 0.1%. Tokyo's Nikkei 225 exhibited volatility, ultimately closing 0.3% higher, reaching a record high of 71,250.06. The Japanese government reported stable consumer prices, excluding volatile fresh foods, but analysts anticipate an uptick in inflation in the upcoming months due to rising energy costs.
Inflation pressures influenced the Bank of Japan to raise its benchmark interest rate to a three-decade high of 1% earlier this week, a significant change after years of maintaining near-zero or negative rates. However, South Korea's Kospi index declined by 0.1% to 9,052.42, and Australia's S&P/ASX 200 fell 0.9% to 8,828.70. India's Sensex dropped by 0.9%. Markets in Hong Kong, Shanghai, and Taiwan were inactive due to the Dragon Boat Festival.
On the previous day, stocks on Wall Street rebounded, recovering much of their earlier losses and marking weekly gains. The S&P 500 rose by 1.1%, while the Dow added a marginal 0.1%. The Nasdaq composite enjoyed a notable rise of 1.9%, spurred by significant gains among technology firms. Noteworthy was Intel's impressive 10.6% surge, following U.S. President Donald Trump's announcement regarding the company's plans to manufacture chips for Apple domestically in the U.S. Other major semiconductor companies also performed well, with Nvidia rising by 3% and Micron Technology jumping 8.7%.
However, SpaceX faced losses for the second consecutive day, resulting in a 3.6% decline after a previous day’s drop of 4.9%, following its much-publicized debut on the U.S. stock market.
Oil prices showed fluctuation as the recent U.S.-Iran agreement aimed at normalizing oil transport through the Strait of Hormuz was signed. Brent crude, the international benchmark, fluctuated throughout the day before settling at $79.85 per barrel, marking a rise of 0.4%. The U.S. benchmark crude fell slightly, down 0.2% to $75.85 per barrel. Early Friday trading observed Brent crude decrease by 0.2% to $79.68 per barrel, while U.S. crude edged up by 0.1% to $75.91 per barrel.
Despite remaining above $70 per barrel – the price prior to the conflict – crude oil values have considerably declined from the $100-plus marks witnessed a few weeks earlier. Increasing energy costs are heightening inflationary pressures, with average gasoline prices in the U.S. dipping below $4 a gallon yet remaining 25% higher compared to the previous year. A surge in shipping costs has also contributed to inflation across various other consumer goods.
The Federal Reserve maintained its key interest rate during its latest meeting but is expected to raise rates by the end of the year due to escalating inflation concerns. Lower interest rates generally ease borrowing for businesses and households, promoting economic growth, but they can also exacerbate inflationary issues.
In foreign exchange markets, the U.S. dollar fell to 161.29 Japanese yen from 161.38 yen, while the euro rose to $1.1464 from $1.1458.
