* Stocks rise on hopes for Middle East de-escalation
* Safe-haven dollar set for weakest week since January
* Oil prices settle down slightly with Strait of Hormuz
largely closed
* US inflation data jumps amid energy shock
NEW YORK/ LONDON, April 10 (Reuters) – Equities were a
mixed bag on Friday while the dollar was lower as investors
waited anxiously for U.S.-Iran talks scheduled for the weekend
after U.S. inflation data surged in line with expectations on
soaring energy prices.
While Tehran and Washington delegations are due to meet in
Pakistan on Saturday, Iran said on Friday that Iranian assets
must be unblocked and a ceasefire must take hold in Lebanon
before peace talks with the United States can proceed.
Investor hopes for a break in Middle East hostilities had been
boosted when Israel said on Thursday that it was seeking talks
with Lebanon as Iran has cited Israel’s continuing attacks on
Lebanon as a key sticking point in its ceasefire agreement with
the United States. The U.S. is requiring Iran to reopen the
Strait of Hormuz, through which roughly a fifth of global energy
supplies are shipped.
Meanwhile, the latest inflation report showed that U.S. consumer
prices increased by the most in nearly four years in March as
the Iran war boosted oil prices and the pass-through from
tariffs persisted, further diminishing chances for Federal
Reserve interest rate cut this year.
On top of inflation concerns related to the Middle East war,
investors are also waiting for the first-quarter earnings season
to begin next week, said Peter Tuz, president of Chase
Investment Counsel in Charlottesville, Virginia.
“Since the war began you’ve seen extra pressure on Fridays
because of uncertainty about what might happen on the weekend,”
said Tuz. He also cited “more uncertainty than usual about
what’s going to come out of earnings season from actual
financial results and probably more importantly, the guidance
about what’s been seen by executives in a bunch of industries
over the past month since the war began.”
Tuz viewed results from TSMC 2330.TW as an encouraging sign for
chipmakers as the world’s largest contract chip manufacturer
reported a 35% surge in first-quarter revenue, ahead of
forecasts, thanks to artificial intelligence-related demand.
The report lent support to the tech-heavy Nasdaq as the
Philadelphia semiconductor index was up 2.7%.
On Wall Street at 2:56 p.m. EDT (1856 GMT) the Dow Jones
Industrial Average fell 258.57 points, or 0.54%, to
47,927.75, the S&P 500 fell 9.15 points, or 0.14%, to
6,815.51 and the Nasdaq Composite rose 58.11 points, or
0.26%, to 22,880.53..
MSCI’s gauge of stocks across the globe rose
1.84 points, or 0.18%, to 1,034.47.
Earlier, the pan-European STOXX 600 index had
closed up 0.37%.
Underscoring investor uncertainty, the CBOE volatility index
reversed earlier losses to gain slightly on Friday after
closing below pre-war levels for the first time on Thursday. It
was last up 0.34 point at 19.83.
Earlier, MSCI’s broadest index of Asia-Pacific shares outside
Japan added 0.9% to put it up 7.3% for the week,
its biggest advance since November 2022. In a sign that the
Middle East conflict is putting cost pressure on the world’s
second-largest economy, China’s factory-gate prices rose for the
first time in 3-1/2 years in March, official data showed
earlier.
With the Strait of Hormuz still largely closed to shipping and
concerns persisting over supplies from Saudi Arabia,oil futures
closed slightly lower after a choppy session. Ship-tracking data
showed on Friday that the majority of ships that have sailed
through the Strait in the past day were linked to Iran.
U.S. crude settled down 1.33% or $1.30 at $96.57 a
barrel and Brent finished at $95.20 per barrel, down
0.75% or 72 cents on the day.
In currencies, the dollar slipped on Friday, putting it on track
for its largest weekly drop since January, as investors sold
safe-haven assets on the assumption that oil shipping will
resume if a ceasefire holds in the Gulf.
The dollar index, which measures the greenback
against a basket of currencies including the yen and the euro,
fell 0.22% to 98.66, with the euro up 0.26% at $1.1729.
However, against the Japanese yen, the dollar
strengthened 0.19% to 159.24.
In U.S. Treasuries, yields edged slightly higher after the U.S.
inflation reading and ahead of the peace talks.
The yield on benchmark U.S. 10-year notes rose
2.4 basis points to 4.317%, from 4.293% late on Thursday while
the 30-year bond yield rose 1.6 basis points to
4.9142%.
The 2-year note yield, which typically moves in
step with interest rate expectations for the Federal Reserve,
rose 2.1 basis points to 3.804%, from 3.783% late on Thursday.
In precious metals, spot gold rose 0.05% to $4,765.93 an
ounce while spot silver rose 1.64% to $76.31 an ounce.
