Oil Falls, U.S. Futures Rise After Trump Calls Off Iran Strikes

By Dow Jones Newswires Staff

Oil fell, while U.S. futures and global markets rose in early morning European trading after President Trump called off further strikes on Iran and said the two countries were close to a peace deal. Gilts and bitcoin fell, while gold rose.

In a social media post Thursday Trump said that "discussions and final points have been, in both concept and great detail, approved by all parties involved." However, Iran said it hadn't reached a final conclusion on the deal.

Elon Musk's SpaceX is due to start trading in New York Friday after pricing its shares at $135 each and raising a record $75 billion, valuing the rocket company at over $1.7 trillion.

Next week, Kevin Warsh is due to chair his first Federal Reserve rate meeting and widely expected to keep rates on hold. The Bank of England is also expected to hold rates while the Bank of Japan is expected to raise rates 25 basis points in line with the European Central Bank which increased rates Thursday for the first time in three years.

--U.S. futures were up after all three major indexes closed higher on Thursday and marking their largest one-day percentage gain since early April. The Dow Jones Industrial Average is up 0.6%, S&P 500 trades up 0.7% and the tech-heavy Nasdaq is 1% higher.

--Asian equities rallied Friday as optimism surrounding a potential U.S.-Iran peace agreement spurred investor appetite for risk assets. South Korea's Kospi index pulled back some gains but still ended 4.6% higher. Japan's Nikkei Stock Average rose 2.8% and Hong Kong's Hang Seng Index advanced 1.4%. Chip stocks have led the gains in Asia after a roller coaster week amid geopolitical volatility concerns over inflation and worries over a bubble in AI stocks.

--European stock indexes opened higher, following U.S. and Asian markets, after President Trump canceled planned attacks on Iran on Thursday and said the final points of a peace plan had been approved by all parties. The Europe-wide Stoxx 600 index was up 1.2%, led by consumer and industrial stocks, although the index was weighed down by energy stocks due to lower oil prices. Repsol, TotalEnergies, Galp and BP shares were all down around 3%. Germany's DAX was up 1.2%, while London's FTSE 100 index and France's CAC 40 were up 0.7% and 1.4% respectively.

--The dollar fell after President Trump pulled back from threats for more military strikes against Iran and said the two sides were nearing a deal. Trump said Iranian Supreme Leader Mojtaba Khamenei had signed off on the plan, which could be completed in coming days. "For now, market is in a relief mode that further escalation can be avoided, and we are moving closer to a deal," Jefferies economist Mohit Kumar said in a note. Improved risk sentiment is negative for the dollar due to its safe haven status, while lower oil prices also weigh on the currency given America's position as a net oil exporter. The DXY dollar index fell 0.1% to 99.803.

--Yields on U.K. government bonds, or gilts, declined after frail GDP data lowered the possibility of the Bank of England raising interest rates. The latest GDP data showed the U.K. economy contracted by 0.1% on month in April, down from 0.3% growth in March. "That economic weakness helps explain why the Bank of England is very unlikely to follow the ECB's decision to hike at its meeting next week," Aberdeen's Luke Bartholomew says in a note. Ten-year gilt yields fell 6.4 basis point to an 11-day low of 4.840%, Tradeweb data show.

--Bitcoin edged marginally lower, remaining in a tight range following a tepid recovery from last week's sharp selloff. Last week's falls appear fueled by a shift in sentiment, underscored by bitcoin-hoarding firm Strategy selling bitcoin holdings for the first time since 2022, ActivTrades analyst Carolane de Palmas says in a note. "This erosion of confidence--paired with steady crypto exchange traded fund outflows and a competitive equity market--is actively draining momentum out of the crypto space, putting pressure on digital assets' prices." Bitcoin fell 0.7% to $62,898, having reached a 20-month low of $59,125 on June 5, LSEG data show.

--Oil prices fell below $90 a barrel on Friday, extending losses from the previous session after President Trump called off planned strikes on Iran and said a peace deal could be reached within days. In early European trade, Brent dropped 2.2% to $88.39 a barrel, while West Texas Intermediate futures were down 2% to $85.91 a barrel. Both benchmarks are headed for weekly losses of around 7%. "The market reaction to the news was swift," analysts at Deutsche Bank said. "The entire oil futures curve moved lower."

--Gold prices rise more than 2% after President Trump's decision to call off strikes against Iran pushed crude below $90 a barrel and boosted investor risk appetite. "With oil prices coming down sharply, alongside hopes that the Strait of Hormuz will reopen, that's seen investors price out the chance of rapid rate hikes this year," analysts at Deutsche Bank say. In early European trading, New York gold futures are up 2.1% to $4,200.40 a troy ounce. Despite the rebound, the metal remains on track for a weekly loss of nearly 7%. The precious metal has been under pressure due to stronger fears that rising energy costs could spur inflation, ?prompting central banks to keep interest rates higher and raising the opportunity cost of holding the non-yielding metal.

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(END) Dow Jones Newswires

06-12-26 0405ET