S&P 500, Nasdaq nab record closing highs, WTI crude falls on hopes for Iran peace deal

Read a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST

NEW YORK, May 26 : The S&P 500 and the Nasdaq advanced on Tuesday, parting ways with their European counterparts, and falling West Texas Intermediate crude prices diverged from spiking Brent oil prices as investors weighed optimism over an imminent U.S.-Iran peace deal against risks the tenuous ceasefire could collapse.

Tech shares, lifted by surging chip stocks, put the Nasdaq out front, while the S&P 500's gains were more modest. The blue-chip Dow was in negative territory.

The S&P 500 and the Nasdaq clinched all-time closing highs.

"WTI is down, but Brent is up, gold is down, but silver is slightly higher, the Dow is down, but the S&P and Nasdaq are up," said Sam Stovall, chief investment strategist of CFRA Research in New York. "It's almost like the asset classes are diversifying by being a little long in one and short in the other, which indicates to me that the market's not really sure what should happen."

CNA Games

Guess Word
Crack the word, one row at a time

Buzzword
Create words using the given letters

Mini Sudoku
Tiny puzzle, mighty brain teaser

Mini Crossword
Small grid, big challenge

Word Search
Spot as many words as you can
Show More
Show Less

"If we do get a true agreement between the U.S. and Iran, then I think the market is ready to take off," Stovall added.

The fragile truce between the United States and Iran was imperilled after the U.S. conducted what it called defensive strikes, which Iran called a "gross violation" of the seven-week-old ceasefire. Even so, both sides indicated progress toward an agreement that would stop the war and resume shipping through the blockaded Strait of Hormuz.

U.S. CONSUMER SENTIMENT DARKENS

Economic data on Tuesday showed the mood of the American consumer, whose spending accounts for 70 per cent of the U.S. economy, darkened slightly in May amid mounting inflation concerns.

The Dow Jones Industrial Average fell 117.29 points, or 0.23 per cent, to 50,462.41, the S&P 500 rose 45.92 points, or 0.61 per cent, to 7,519.39 and the Nasdaq Composite rose 312.21 points, or 1.19 per cent, to 26,656.18.

European shares dipped on fears that the U.S. missile strikes in southern Iran could disrupt peace negotiations and extend the Strait of Hormuz blockade, which sent Brent crude prices higher and fueled inflation worries.

Investors were also weighing comments from European Central Bank board member Isabel Schnabel, who said the central bank should hike rates in June, even if a U.S.-Iran peace deal is reached.

MSCI's gauge of stocks across the globe rose 3.32 points, or 0.3 per cent, to 1,121.47.

The pan-European STOXX 600 index fell 0.57 per cent, while Europe's broad FTSEurofirst 300 index fell 15.66 points, or 0.62 per cent.

Brent crude prices spiked after settling 7 per cent lower in the previous session. In contrast, U.S. WTI oil slid from Friday's close. There was no WTI settlement on Monday due to the Memorial Day holiday.

U.S. crude fell 2.81 per cent to settle at $93.89 per barrel, while Brent settled at $99.58 per barrel, up 3.58 per cent.

U.S. Treasury yields fell as hopes for a deal to reopen the strait helped soothe inflation fears.

The yield on benchmark U.S. 10-year notes fell 8 basis points to 4.493 per cent, from 4.572 per cent late on Friday.

The 30-year bond yield dropped 5.4 basis points to 5.0283 per cent from 5.082 per cent late on Friday.

The 2-year note yield, which typically moves in step with interest rate expectations for the U.S. Federal Reserve, fell 8.2 basis points to 4.045 per cent, from 4.127 per cent late on Friday.

The dollar firmed amid dimming hopes for a near-term resolution to the Middle East conflict.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.1 per cent to 99.14, with the euro down 0.09 per cent at $1.1632.

Against the Japanese yen, the dollar strengthened 0.25 per cent to 159.29.

In cryptocurrencies, bitcoin fell 1.63 per cent to $75,946.11. Ethereum declined 1.66 per cent to $2,072.64.

Gold prices fell as energy-driven inflation stoked rate hike bets amid faltering hopes for a U.S.-Iran peace deal.

Spot gold fell 1.36 per cent to $4,508.39 an ounce. U.S. gold futures fell 0.44 per cent to $4,501.10 an ounce.

Newsletter

Week in Review

Subscribe to our Chief Editor’s Week in Review

Our chief editor shares analysis and picks of the week's biggest news every Saturday.

Sign up for our newsletters

Get our pick of top stories and thought-provoking articles in your inbox

Subscribe here

Get the CNA app

Stay updated with notifications for breaking news and our best stories

Download here

Get WhatsApp alerts

Join our channel for the top reads for the day on your preferred chat app

Join here