US Equities Split as Oil Plunges Below $100 Amid Iran Peace Hopes
Crude oil futures fell below the $100 a barrel mark as markets digested optimism surrounding a US proposal to end the conflict in the Strait of Hormuz, easing inflation concerns and sparking a rally in gold.
US equities displayed a divided performance on Thursday, with the Nasdaq Composite rising 0.5% and the S&P 500 climbing 0.2%, while the Dow Jones Industrial Average slipped 0.1%. This divergence occurred as investors awaited Iran's response to a US peace proposal aimed at ending the near-10-week conflict and reopening the Strait of Hormuz. Concurrently, crude oil prices fell below $100 a barrel, alleviating inflation concerns and sparking a rally in gold.
Corporate earnings highlighted contrasting trends, with technology and cloud monitoring sectors outperforming traditional manufacturing. Shares in Datadog surged more than 30% following strong AI-driven growth and raised full-year revenue expectations. In contrast, Whirlpool shares dropped significantly after reporting first-quarter results that missed Wall Street estimates due to demand conditions described as the worst since the 2007/2008 financial crisis.
The semiconductor sector continued its historic rally, contributing to the broader market strength. However, the labour market presented a mixed picture, with initial jobless claims rising to 200,000. The Challenger report on layoffs also indicated that the tech sector was hit hardest by job cuts, with AI cited as a primary driver for the reductions.
Whirlpool's decline was attributed to a perfect storm of low consumer sentiment and winter weather impacting its North America business. The company reported that demand for major appliances reached recession-level lows, with revenue declining nearly 10% year over year to $3.27 billion. The adjusted loss per share was significantly higher than the Street forecast, reflecting the severity of the downturn in the appliance market.
Conversely, Datadog cited AI as a leading driver for growth, noting that digital transformation and cloud migration remain long-term secular growth drivers. The company reported earnings of $0.60 per share, outperforming expectations, and raised its full-year revenue guidance to between $4.3 billion and $4.34 billion. CEO Oliver Pommel highlighted new deals with major technology companies' AI research divisions as a key factor in the company's performance.
Gold prices steadied after its biggest daily advance since late March as traders assessed the optimism of a potential US-Iran deal. The decline in energy prices weighed on bond yields, while the dollar fell to pre-war levels, providing tailwinds for the precious metal which is priced in US currency and does not offer interest.
