Stan Choe
The US stock market is ticking toward records as it catches up with climbs for others around the world from the day before, when President Donald Trump said negotiations were “proceeding nicely” with Iran on ending their war.
The S&P 500 rose 0.6 per cent after trading resumed following Monday’s holiday. The Dow Jones was down 156 points, or 0.3 per cent, and the Nasdaq composite was 1.1 per cent higher. The indexes are at or near all-time highs.
The Australian sharemarket is set to retreat, with futures at 4.57am AEST pointing to a fall of 17 points, or 0.2 per cent, at the open. The ASX lost 0.4 per cent on Tuesday. The Australian dollar was trading at US71.67¢.
Wall Street’s indexes pared gains from earlier in the morning as fighting continued in the region, and the US military said it carried out “self-defence” strikes in southern Iran, including on missile launch sites and boats placing mines. Markets have rallied in the past on hopes for a coming end to the war with Iran, only to see the conflict drag on.
The price for a barrel of Brent crude, the international standard, rose 3.4 per cent to $US96.63, but that reclaimed only some of its 7.1 per cent plunge from Monday. The price for a barrel of US crude oil, meanwhile, fell 2.8 per cent to settle at $US93.89.
Oil prices have been at the centre of the action for financial markets since the United States and Israel attacked Iran in late February. The ensuing war has closed the Strait of Hormuz to most oil tankers, keeping crude pent up in the Persian Gulf instead of flowing to customers worldwide. That in turn has driven up oil’s price and sent a wave of painful inflation around the world.
Hopes for a deal to improve the flow of oil helped lift stocks of companies with big fuel bills. United Airlines rose 5.6 per cent, and cruise operator Carnival steamed 3.2 per cent higher.
The lower oil prices also helped pull yields down in the US bond market, which eased the pressure on Wall Street. The yield on the 10-year Treasury fell to 4.50 per cent from 4.56 per cent late on Friday.
It’s a respite following recent gains for yields in bond markets worldwide, which threatened to slow economies and undercut prices for stocks and all kinds of other investments. High yields have already forced the average long-term US mortgage rate to its most expensive level since last summer, and they could curtail companies’ borrowing to build the artificial-intelligence data centres that have supported the US economy’s growth recently.
Big technology stocks also continued their big runs. Micron Technology leaped 20.9 per cent to top $US900 and was the strongest force lifting the S&P 500 after analysts at UBS led by Timothy Arcuri raised their 12-month price target for the stock to $US1625 from $US535. They’re forecasting continued strength in demand for computer memory, and Micron’s stock has already tripled so far this year.
That helped offset a drop of 10.8 per cent for AutoZone, which reported slightly weaker revenue for the latest quarter than analysts expected, though its profit topped expectations. CEO Phil Daniele said performance for the retailer’s stores in Brazil and Mexico was below its plan.
Most big US companies have been reporting both profit and revenue for the start of 2026 above what analysts expected. The strong performances have helped vault US stocks to records, even with all the uncertainty around oil prices and the war with Iran.
US households have been feeling discouraged about the economy because of accelerating inflation, and a report on Tuesday said consumer confidence edged downward in May, though the number was not as bad as economists expected. It followed a report on Friday that said sentiment among US consumers hit its lowest level on record.
In stock markets abroad, indexes were mixed. South Korea’s Kospi jumped 2.5 per cent as it caught up with other markets following its closure on Monday for a holiday.
London’s FTSE 100 added 0.2 per cent even though British petroleum giant BP fell 4.2 per cent there. BP ousted its chairman Albert Manifold over what it called serious concerns related to “important governance standards, oversight and conduct.”
Japan’s Nikkei 225 slipped 0.2 per cent from its all-time high set the day before.
AP
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