US Stocks Mixed Ahead of Weekend – Nasdaq down 0.6%
US equity markets finished mixed on Friday as investors weighed ongoing developments in the Middle East ahead of what was expected to be a significant weekend for geopolitical headlines. While the broader market was relatively subdued, investors remained cautious amid elevated uncertainty, with Treasury yields easing modestly from recent highs and the US dollar continuing to trade near its strongest levels of the year.
The Dow Jones outperformed, gaining 0.46% to close at 51,947 as buying in industrial and defensive sectors offset weakness elsewhere. The broader S&P 500 edged just 0.05% higher to finish at 7,411, while the technology-heavy Nasdaq fell 0.64% to 24,975 as investors continued to take profits in growth stocks following the recent rise in bond yields.
US Treasury yields moved slightly lower as investors adopted a more defensive stance heading into the weekend. The two-year Treasury yield slipped 1.6 basis points to 4.331%, while the benchmark 10-year yield also eased 1.6 basis points to 4.677%. Despite the pullback in yields, the US dollar remained well supported, with the US Dollar Index edging 0.02% higher to 101.47 as demand for safe-haven assets persisted.
Commodity markets saw oil prices retreat after a strong rally in recent sessions. Brent crude fell 3.88% to settle at US$96.78 per barrel, while West Texas Intermediate declined 3.12% to US$89.31. Gold, meanwhile, recovered modestly from Thursday’s decline, rising 0.13% to close at US$4,052.56 per ounce.
Oil Drops on Peace Hopes – Brent down 6%
Oil prices have dropped further on the Asian open this morning as peace hopes for the Middle East have increased dramatically over the weekend. Oil had already pulled back on Friday, and the move lower followed reports that China is attempting to bring the United States and Iran back to the negotiating table. However, news over the weekend that the US has paused attacks and Iran will follow suit has seen further downside moves this morning, with Brent dropping nearly 7% on the open to trade back under the $90 level before rallying slightly as more liquidity came into the market. Traders are now expecting more volatility in the sessions ahead as they seek clarity on whether this is just a pause in the conflict, as some are suggesting, or if both sides will come back to the negotiating table with real purpose.
Markets Open on a Positive Note on Quiet Calendar Day
Attention now turns to the start of a new trading week, with markets expected to remain highly sensitive to any geopolitical developments that have emerged over the weekend. It looks like being a positive start to the week, with peace hopes increasing in the last couple of days as the US paused strikes against Iran over the weekend and Iran has agreed to do the same. While the economic calendar is relatively quiet, traders will closely monitor Germany’s IFO Business Climate Survey (exp. 86.1) during the European session before attention shifts to the United States, where Durable Goods Orders (exp. +1.6% m/m, Core +0.9% m/m) will provide further insight into the health of the manufacturing sector. With geopolitical risks remaining elevated and central bank expectations continuing to evolve, another volatile week across global financial markets is likely.
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