Wall Street extends winning streak as crude retreats on Iran truce hopes
Investors reacted to reports of a US-Iran agreement to lift Strait of Hormuz shipping restrictions, though President Donald Trump had not yet formally approved the deal.
US equities closed higher on Friday, extending a weekly winning streak as crude oil prices retreated on renewed hopes for a peaceful resolution to the conflict with Iran. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all posted modest gains, with the S&P 500 achieving its ninth consecutive weekly rise, marking its longest winning streak since December 2023.
The rally was described as narrow and tech-led, lifting all three major US indexes to modest gains. Despite the positive close, the indexes were well off session highs by the closing bell. The S&P 500 rose 16.49 points, or 0.22 per cent, to 7,580.12, while the Dow Jones Industrial Average gained 363.68 points, or 0.72 per cent, to 51,032.65. The Nasdaq Composite rose 55.15 points, or 0.21 per cent, to 26,972.62.
Investors reacted to reports that the United States and Iran had agreed to extend their ceasefire and lift shipping restrictions in the Strait of Hormuz. However, President Donald Trump had not yet formally approved the deal, and Iranian state media stated the agreement had not been finalised. Ross Mayfield, an investment strategy analyst at Baird, noted the administration's tendency to time major announcements for market closure to control messaging.
Crude oil prices fell as the market awaited confirmation of the truce extension. Brent crude settled at $92.05 per barrel, down 1.77 per cent, while US crude fell 1.73 per cent to $87.36 per barrel. The three-month-long conflict has contributed to upward pressure on inflation, prompting Federal Reserve officials to consider potential interest rate hikes. Market pricing had indicated approximately a 50 per cent chance of a rate hike in the fourth quarter.
Treasury yields fell for a fourth consecutive session, and the dollar dipped slightly. The yield on benchmark US 10-year notes fell 1.4 basis points to 4.441 per cent, while the dollar index fell 0.1 per cent to 98.90. European and emerging market shares also closed higher, with global equities benefiting from the prospect of reopened shipping lanes. Gold prices rose 1.18 per cent to $4,545.00 an ounce, though the metal remained on course for a monthly drop.
