Stan Choe
Updated ,first published
Australia’s stock market is set for a cautious open amid renewed tensions in the Middle East as SpaceX makes its expected Wall Street debut.
The S&P 500 added 0.5 percent to close its 10th winning week in the past 11. The Dow Jones Industrial Average rose 353 points, or 0.7 percent, and the Nasdaq composite gained 0.3 percent. ASX futures point to a gain of 39 points, or 0.4 per cent, on the open, but the latest developments in the Middle East conflict will weigh on investors, with Israel launching airstrikes against Lebanon this morning.
US President Donald Trump he criticized Israel for the attacksfearing they might break the deal with Iran to end the months-long war. In a sign of Trump’s anger over the strikestold the Axios website that the Israeli Prime Minister “didn’t have a f— decision” and had put the talks in jeopardy, but expressed confidence that a peace deal would happen.
“Why did Bibi have to do the f—ing attack? I was so angry,” Trump told Axios, using the Israeli leader’s nickname.
On Friday, Wall Street stocks rallied from a 3.4 percent drop in Brent crude prices to $87.33 a barrel, extending its losses for the week. Oil prices have fallen since Trump on Thursday backed off his threat to attack Iran and said a deal with Iran might be near.
A deal to end the war could reopen the Strait of Hormuz and allow tankers to once again deliver crude from the Persian Gulf to customers around the world. Its near shutdown since the start of the war has caused the price of Brent to rise from about 70 US dollars per barrel and cause a wave of painful inflation for the world.
Of course, financial markets have risen in the past with hopes that the end of the war with Iran was near, only to be disappointed.
Wall Street’s biggest factor in the past week has been artificial intelligence stocks, and how they went from roaring to record lows. The concern is whether such stocks rose too much, too quickly because of AI intelligence, and their maintenance measures have sometimes changed direction by the hour.
SpaceX suggested a lot of demand still exists among AI investors later its stock rose by 19.2 percent on its first day of business. That gave Elon Musk’s rocket company a total value of $US2.1 trillion ($3 trillion), making it bigger than Exxon Mobil, Bank of America and Coca-Cola combined. In addition to making rockets, SpaceX also owns the intelligence company xAI.
AI-related stocks were otherwise mixed following their roller-coaster run in the past week. Micron Technology’s 1.4 percent drop was one of the heaviest weights on the S&P 500, but CoreWeave jumped 5 percent after learning it would join the Nasdaq 100 later this month.
Elsewhere on Wall Street, Adobe fell 6.8 percent despite reporting stronger profit and revenue for the latest quarter than analysts expected.
Its shares have lost nearly 42 percent so far this year, and it announced its chief financial officer is leaving the company on Monday. Adobe is already looking for a CEO to replace Shantanu Narayen, who announced in March that he was stepping down after 18 years as Adobe’s leader.
All told, the S&P 500 rose 37.16 points to 7,431.46. The Dow Jones Industrial Average rose 353.51 to 51,202.26, and the Nasdaq composite rose 79.18 to 25,888.84.
In the bond market, Treasury yields rose to recover some of the sharp decline from the previous day, when oil prices fell following Trump’s announcement. The yield on the 10-year Treasury rose to 4.48 percent from 4.45 percent late Thursday.
Higher yields can slow the entire economy and lower prices for all types of investments, including stocks and cryptocurrencies. They affect seemingly more expensive investments in particular, and some critics call the AI industry a bubble in which investment has skyrocketed.
Yields rose after reports suggested sentiment among US consumers was not as bad as economists had feared. A previous study from the University of Michigan said feelings improved more than expected. U.S. consumers said they felt a sense of relief after gasoline prices fell slightly earlier in the month.
In foreign stock markets, indexes rose as they posted Thursday’s biggest gains on Wall Street.
South Korea’s Kospi jumped 4.6 percent, paring its losses from earlier this month taken on a selloff in AI-related stocks. Kospi has almost doubled since the beginning of the year.
Tokyo’s Nikkei 225 rose 2.8 percent, and France’s CAC 40 rose 1.8 percent for the world’s two biggest measures.
AP
The Market Recap is a summary of the day’s trading. Let’s find each otherekday afternoon.
