By Dow Jones Newswires Staff
The dollar strengthened and global bond markets stabilized after President Trump said he called off a plan to attack Iran, though markets remained cautious as inflation concerns continue to weigh on sentiment.
Brent crude oil edged back above $110 a barrel following an earlier 2% slide, after Trump said he would "hold off" a planned attack in order to make room for peace negotiations following requests from Gulf allies.
U.S. stock futures were unmoved by the president's statement, with major indexes trading flat premarket after tech stocks faltered in Asia.
For the day ahead, markets will watch for U.S. pending home sales data for April.
--In early European trading, Brent crude fell 1.6% to $110.32 a barrel, while WTI futures were down 0.5% to $103.9 a barrel. "The oil market continues to trade in wide ranges, and it remains extremely sensitive to Iran-related headlines," analysts at ING said. "ICE Brent traded almost in a $6/bbl range yesterday." Meanwhile, the U.S. extended a sanctions waiver allowing countries to purchase Russian oil currently stranded at sea for another 30 days--a move that analysts say will be welcomed by Asian buyers, who are more exposed to supply disruptions in the Middle East.
--In the U.S., futures for the S&P 500 were flat, while the Dow Jones Industrial Average edged 0.05% higher. Futures for the tech-heavy Nasdaq also traded flat.
Google-owner Alphabet rose 0.5% and Blackstone rose 1.1% in premarket trade after the two companies said they would partner to create an artificial-intelligence cloud company.
--Asian stocks were mixed after their recent rally. Japan's Nikkei Stock Average declined 0.4% and South Korea's Kospi fell 3.25%, both dragged by chip stocks. Hong Kong's Hang Seng Index was last 0.4% higher. Still, analysts think the AI boom and a strong earnings cycle will likely continue to drive Asian equities' rally in the second half of the year.
--Europe's blue-chip stock indexes rose in early trade, extending gains made in the last session. Software stocks led European sectors as the continent-wide Stoxx 600 gained 0.4%. Germany's DAX was 0.55% higher, led by a 3.5% gain for SAP. Defense and industrials group Rheinmetall continued its share price recovery, gaining 3.4%. London's FTSE 100 was 0.5% higher, with investment platform IG Group up 7.4% after reporting first-quarter earnings. Software group Sage rose 2.6%. Software companies also led the CAC 40 higher in Paris. The index was up 0.3% as Dassault Systemes and Capgemini both rose close to 3%. The Dutch AEX climbed 0.6%, with software stock Wolters Kluwer up 2.2%. Spain's IBEX 35 nudged up 0.1%, while the Italian FTSE MIB was flat.
--The dollar fell, with the DXY dollar index slipping 0.1% to 99.098. In the U.K., sterling fell 0.25% to $1.3400 after data showed higher U.K. unemployment and slower wage growth.
--U.S. Treasury yields edged higher in early European trade, remaining at elevated levels despite a small pullback overnight. "The sell-off in global fixed income markets has stabilized in the last 24 hours with importantly the short-end of the USD curve even coming lower driving a slight steepening of the curve," Danske Bank's Kristoffer Kjaer Lomholt said in a note. The two-year Treasury yield rise 1.9 bps to 4.078%, while the 10-year yield was up 1.8 bps at 4.608%.
--Eurozone government bond yields edged lower. Government bond supply will be modest from the eurozone, with Germany selling 5 billion euros in April 2031 Bobl and Finland auctioning up to 1.5 billion euros in April 2030- and April 2041-dated bonds. The 10-year German Bund yield fell 1 basis point to 3.150% having hit a 15-year high of 3.193% on Monday.
--Gold prices held just above $4,500 a troy ounce, pressured by expectations of higher interest rates as the Iran conflict drags on. Futures in New York are down 0.2% to $4,549.30 a troy ounce. President Trump's decision to hold off on a planned attack on Iran provided some support, though bullion is down more than 13% since the war began. "Escalating tensions can weigh on gold through higher yields and a stronger dollar, while any credible path toward de-escalation or peace may ultimately support prices," analysts at Saxo Bank said.
Write to Barcelona Editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
05-19-26 0428ET
