* Oil prices settle lower after choppy trade
* Wall Street stocks pull back after chip company surge
* Yen stable after spikes, intervention jitters persist
May 7 (Reuters) – U.S. and European stocks slipped on
Thursday, as oil prices swung between gains and losses in
volatile trading with investors still uncertain about peace
negotiations between the U.S. and Iran.
On Wall Street, major stock indexes pulled back slightly a
day after strong chipmaker earnings pushed them to multiple
records. The S&P 500 fell 0.4%, the Nasdaq Composite
dipped 0.1% and the Dow Jones Industrial Average
lost 0.6%.
Oil prices ultimately settled lower after a report said
Saudi Arabia and Kuwait lifted restrictions on U.S. use of their
airspace and military bases, allowing Washington to restart
operations to escort commercial ships through the Strait of
Hormuz as early as this week.
Brent crude futures settled down 1.2% or $1.21 at
$100.06 a barrel, while U.S. West Texas Intermediate crude
futures settled down 0.28% or 27 cents at $94.81. Both
benchmarks had earlier declined by as much as $5 a barrel on
optimism that Washington and Tehran were moving toward a
limited, temporary agreement to halt their conflict.
Europe’s STOXX 600 finished 1.1% lower, having
jumped 2.2% on Wednesday, while MSCI’s broadest index of
Asia-Pacific shares outside Japan hit a fresh
all-time high, up 1.6%. Japan’s Nikkei crossed 62,000
for the first time.
MSCI’s All-Country World Index ticked down 0.1%, holding
around record highs.
OIL RISK
“Oil volatility may be having less of an effect on the stock
market’s day-to-day performance, but its longer-term impact on
inflation is still an open question,” Daniel Skelly, head of
Morgan Stanley‘s Wealth Management Market Research & Strategy
Team, wrote in a note on Thursday.
Brent is still around 40% above its late-February level,
when the war began, while 10-year Treasury yields
have surged – a reminder of the strain higher energy costs
continue to put on the global economy. Ten-year U.S. Treasury
yields rose by 2.8 basis points to 4.382%.
“Certainly the clock is ticking towards a point … when the
pace at which oil inventory drawdowns at the current pace become
unsustainable and energy prices jump materially,” Investec
market strategists wrote in a note on Thursday.
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 fueled 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, although Intel and
Advanced Micro Devices declined on Thursday, paring
gains from earlier this week.
“U.S. earnings confirm a broad-based profit boom – record
EPS (earnings per share) beats, all-time-high margins and
sharply upgraded ’26 growth expectations,” Manish Kabra, a
market strategist with Societe Generale, wrote in a client note
on Thursday.
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 was little changed at
$1.174. The dollar index, which measures the U.S.
currency against six units, was also flat.
The yen remained in the spotlight after spikes in
recent sessions prompted market speculation that Japan had
intervened to support the long-battered currency.
The yen ticked down 0.24% at 156.76 per dollar, having hit a
10-week high of 155 on Wednesday.
(Reporting by Lawrence Delevingne in Boston, Sophie Kiderlin in
London and Ankur Banerjee in Singapore; Editing by Elaine
Hardcastle, Nick Zieminski, Susan Fenton, Will Dunham, Nia
Williams and David Gregorio)
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