The U.S. stock market is rising as it catches up with others around the world that climbed the day before, when U.S. President Donald Trump said negotiations were “proceeding nicely” with Iran on ending their war.
The S&P 500 rose 0.6 per cent early Tuesday after trading resumed following Monday’s holiday. The Dow Jones Industrial Average edged up 44 points, and the Nasdaq composite climbed 0.9 per cent. All three indexes are at or near their all-time highs. The price for a barrel of Brent crude, the international standard, rose three per cent. Treasury yields moved lower in the bond market.
Shares were mixed Tuesday in Europe and Asia after the U.S. military said it carried out what it called “self-defense” strikes in southern Iran, including on missile launch sites and boats placing mines.
In early European trading, Germany’s DAX lost 0.7 per cent to 25,214.08, while the CAC 40 in Paris shed 0.9 per cent to 8,187.07. In Britain, the FTSE 100 gained 0.7 per cent to 10,540.40.
The futures for the S&P 500 and the Dow Jones Industrial Average were up 0.5%.
Oil prices were mixed, with Brent crude rising but still trading below $100 a barrel while U.S. benchmark crude oil fell.
The U.S. military said the strikes Monday were done “to protect our troops from threats posed by Iranian forces.” It said it used restraint due to the ceasefire with Iran, which gave no official response. Further details were not immediately available, including more specifics on threats from Iran and what this means for negotiations.
With the status of peace talks with Iran unclear, markets have been swayed by various developments and comments by Trump.
“Markets are behaving as though a full Iran breakthrough already exists, even though the hardest parts of the negotiation remain unresolved,” Stephen Innes of SPI Asset Management wrote in a commentary. “Washington continues to signal optimism, while Tehran insists no agreement is imminent.”
During Asian trading, Tokyo’s Nikkei 225 lost 0.3 per cent to 64,996.09, falling back from an all-time high close over 65,000 on Monday.
In Hong Kong, the Hang Seng index was nearly unchanged at 25,599.45, while the Shanghai Composite index shed 0.2 per cent to 4,145.37.
South Korea’s Kospi jumped 2.6 per cent to 8,047.51, catching up after markets were closed Monday for a holiday.
The S&P/ASX 200 in Australia lost 0.4 per cent to 8,657.80.
Benchmark U.S. crude oil declined US$3.67 to US$92.97 a barrel. Brent crude, the international standard, gained US$3.03 to US$96.45 a barrel after falling nearly US$5 on Monday.
U.S. markets were closed on Monday for the Memorial Day holiday. On Friday, the S&P 500 added 0.4 per cent and the Dow industrials climbed 0.6 per cent. The Nasdaq composite gained 0.2 per cent.
Global markets advanced Monday after regional officials in the Middle East said the United States was close to reaching an agreement with Iran to end the war, reopen the Strait of Hormuz and see Iran give up its stockpile of highly enriched uranium. But it’s not clear when or how the deal might be finalized and when its various parts will take effect.
An end to the war would ease concerns throughout a region that saw Gulf havens and travel hubs like the United Arab Emirates struck by Iranian missiles and drones.
It would allow for global shipping, including an estimated 20 per cent of the world’s oil, to resume flowing through the Strait of Hormuz. It also would allow the rebuilding of energy and other infrastructure in the region.
In other dealings early Tuesday, the U.S. dollar rose to 159.09 Japanese yen from 158.91 yen. The euro cost $1.1636, down from US$1.1645.
Elaine Kurtenbach, The Associated Press