Stocks Edge Up, Oil Prices Continue Pullback On Peace Optimism

Global stocks mostly held their gains on Thursday while oil prices sank again on optimism over a U.S.-Iran ​peace deal, even as the fate of the critical Strait of Hormuz appeared unresolved.

On Wall Street, the previous session’s ‌record highs held, with the S&P 500 (.SPX), little changed, and the Nasdaq Composite (.IXIC), up 0.27%. The Dow Jones Industrial Average (.DJI), rose 0.12%.

Europe’s STOXX 600 (.STOXX), was 0.37% lower, having jumped 2.2% on Wednesday, while MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), hit a fresh all-time high. It was last up 1.75%. Japan’s Nikkei (.N225), ​crossed 62,000 for the first time as trading resumed after an extended holiday weekend.

MSCI’s All-Country World Index rose 0.37% to ​trade around record highs.

While the Middle East situation was uncertain, “the momentum is going in a good direction” ⁠and markets had taken note of it, Lombard Odier Chief Economist Samy Chaar said.

“So the oil price is down from its highs, which ​is obviously relieving pressure on yield curves and bond yields, and that is great news for equity valuation and makes currencies move a ​bit,” he said.

A strong earnings season and a relatively robust macroeconomic environment added to a positive market mood, Chaar added.

TRUMP PREDICTS SWIFT END TO WAR

The United States and Iran are edging toward a limited, temporary agreement to halt their war, sources and officials said on Thursday, with a draft framework that would stop ​the fighting but leave the most contentious issues unresolved.

Brent crude fell almost 4% to $97.38 a barrel, having tumbled nearly 8% on Wednesday.

Even after ​that slide, Brent is still around 40% above its late-February level, when the conflict began, while 10-year Treasury yields have surged — a reminder of the strain ‌higher ⁠energy costs continue to put on the global economy.

On the day, 10-year Treasury yields were last down by 2 basis points to 4.334%.

Nick Twidale, chief market strategist at ATFX Global, said the market was wrestling with execution risk, “both in terms of whether a deal is finalised and how quickly disrupted flows would normalize even if it is.”

Rocketing oil prices whacked global markets in March but a fragile ceasefire and prospect ​of a deal have spurred a ​risk-on rally since April that ⁠has been fuelled by strong tech earnings reports.

S&P COMPANIES SET FOR ROBUST PROFIT GROWTH

S&P 500 companies are on track for their strongest profit growth in more than four years, while blowout results from Samsung (005930.KS), SK Hynix (000660.KS), ​and TSMC (2330.TW), have reinforced the upbeat tone in Asia.

Investors await the U.S. non-farm payrolls report on Friday, with jobs ​expected to have ⁠increased in April by 62,000 after rebounding 178,000 in March, a Reuters survey of economists shows.

In currency markets, the euro nudged higher and last fetched $1.1773. Sterling was slightly higher at $1.3624 as UK local elections came into focus.

The dollar index , which measures the U.S. currency against six units, was ⁠a touch ​lower at 97.85.