By Dow Jones Newswires Staff
Oil prices edged lower and stocks gained in cautious trade, as markets await Iran's response to a U.S. memo that would declare an end to the conflict and gradually reopen the Strait of Hormuz.
U.S. and Iranian diplomats are working with mediators on an agreement to restart negotiations, The Wall Street Journal reported. The dollar, U.S. Treasurys and oil opened the European session steady, before all three assets fell after Saudi Arabian state-owned news site Al Arabiya said intense talks are continuing to establish a framework for opening the strait, citing unnamed sources.
Stock markets continued to gain as investor exuberance accelerated. Japan's Nikkei closed at a new record, and the U.S. Nasdaq and S&P 500 are both set to extend their own records.
--Oil prices extended their fall in early European trade. Brent crude fell below $100 a barrel, with the contract for July delivery down 2.6% to $98.60 a barrel. WTI futures for June were down 2.5% to $92.79 a barrel. Brent crude is down more than 10% for the week.
--In the U.S., futures for the S&P 500 climbed 0.2%, while the Dow Jones Industrial Average climbed 0.25%. The tech-heavy Nasdaq rose 0.3% premarket.
McDonald's is among the companies set to report earnings ahead of market open Thursday.
--In Asia, Japan's Nikkei Stock Average closed 5.6% higher at an all-time high of 62833.84. The index posted its biggest daily percentage gain since April 2025, led by chip stocks. SoftBank Group surged 18% and Kioxia Holdings soared 19%, playing catchup with overseas peers following holidays in Japan from Monday through Wednesday.
South Korea's Kospi also notched a fresh peak, finishing 1.4% higher as airline and auto stocks advanced. Australia's S&P/ASX 200 benchmark index ended 1.0% higher while China's Shanghai Composite closed 0.5% higher. Hong Kong's Hang Seng Index gained 1.5%, while Singapore's FTSE Straits Times Index rose 0.3%.
--European stock indexes largely gained at market open in cautious early trade. The Europe-wide Stoxx 600 index nudged 0.2% higher. Germany's DAX was 0.3% higher as autos gain. A handful of industrials in the index slid, including a 2.6% drop for Rheinmetall after earnings. In Paris, the CAC 40 rose 0.4% as luxury stocks that dominate the index extend Wednesday's rally, with sector bellwether LVMH up 2.5%. London's FTSE 100 slipped 0.3%, dragged by oil major Shell, which fell 2.3% after posting earnings. The Italian FTSE MIB and Spanish IBEX 35 both gained 0.1%. The Dutch AEX was 0.2% lower as software stocks slipped, though semiconductor stocks gained.
--The DXY dollar index fell 0.1% to an intraday low of 97.856 following the report on diplomatic talks, though the index is yet to break a two-month low of 97.625 hit Wednesday. The greenback was trading stable earlier in the session.
--U.S. Treasury yields edged lower after beginning the European session stable. The 10-year yield fell 3 basis points to 4.324% after the decline in oil accelerated.
Yields on eurozone and U.K. government bonds fell. Focus for U.K. gilts is also on U.K. politics, where the ruling Labour Party is expected to suffer significant losses in local elections. Ten-year gilt yields were down 2.4bps to last trade at 4.910%, Tradeweb data showed. Ten-year Bund yields fell 3.6bps to 2.963%.
--Bitcoin eased slightly but remained above $80,000 after reaching a three-month high Wednesday on hopes for a U.S.-Iran peace deal. Bitcoin has showed resilience throughout the conflict, exhibiting low volatility, which has encouraged investors to buy the cryptocurrency, Trade Nation's David Morrison said in a note. Bitcoin fell 0.1% to $81,369 after rising to as high as $82,793 Wednesday, LSEG data showed.
--Gold prices pushed above $4,750 as a decline in oil prices encourages the outlook for precious metals. New York gold futures gained 1.4% to $4,758.00 a troy ounce. "Falling oil prices and easing inflation concerns pushed bond yields and the dollar lower, supporting gold prices," MUFG's Soojin Kim said.
Write to Barcelona Editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
05-07-26 0453ET
