Oil prices fell further on Thursday following the agreement between US President Donald Trump and his Iranian counterpart to end four months of conflict and restore navigation through the Strait of Hormuz for tankers and cargo vessels.
Wall Street opened cautiously higher about half an hour into trading, with the Dow, the broader S&P 500 and the tech‑focused Nasdaq each edging up slightly more than 0.5 percent.
These gains followed steep declines in the prior session, when the US Federal Reserve lifted its inflation outlook and projected higher US interest rates for the year, strengthening the dollar.
‘Politics and economics are at the forefront for markets,’ said Russ Mould, investment director at AJ Bell.
‘The United States and Iran have signed an initial agreement to end the war, putting further downward pressure on oil prices,’ he noted.
However, the Fed’s hint at a potential rate increase ‘took the market by surprise and sparked a wobble’ across Wall Street and other venues, he added.
Kevin Warsh, the newly appointed Fed chair, has pledged to ‘deliver price stability’ following his first policy meeting, despite repeated calls from Trump for lower rates.
‘Persistently high prices place a burden on the American people,’ he said after the meeting, which succeeded an interest‑rate hike by the European Central Bank the previous week.
‘The prospect of a hawkish Fed stance and higher interest rates weighs heavily on risk appetite,’ observed Ipek Ozkardeskaya, senior analyst at Swissquote.
Forex.com market analyst Fawad Razaqzada noted, ‘The Fed is essentially signalling readiness to act if inflationary pressures re‑emerge.’
He added that ‘If lower energy costs continue to filter into inflation data, policymakers may ultimately find sufficient justification to keep rates unchanged for an extended period rather than resume tightening.’
Crude futures slipped roughly two percent on Thursday after a deal aimed at resolving the US‑Israel conflict with Iran, which had restricted shipping through the Strait of Hormuz and spurred a spike in energy prices.
‘However, the latest ECB and Fed decisions indicate that policymakers do not necessarily count on lower oil prices to immediately quell inflationary pressures,’ Ozkardeskaya remarked.
European markets failed to gain momentum.
London’s benchmark FTSE 100 index slipped nearly one percent in mid‑afternoon, as the Bank of England was widely expected to hold its key interest rate steady despite elevated inflation.
Frankfurt and Paris were largely flat two hours before the market close.
Earlier in Asian trading, Seoul surged more than two percent, surpassing 9,000 points for the first time, buoyed by a fresh rally in chip giants Samsung and SK Hynix amid the continuing AI boom.
Tokyo, meanwhile, closed above 71,000 points for the first time.
– Key figures (as of 13:45 GMT) –
Brent North Sea Crude: DOWN 1.5 percent at $78.02 per barrel
West Texas Intermediate: DOWN 2.2 percent at $74.56 per barrel
New York – Dow: UP 0.6 percent at 51,776.00 points
New York – S&P 500: UP 0.7 percent at 7,470.20
New York – Nasdaq: UP 0.7 percent at 26,197.14
London – FTSE 100: DOWN 1.0 percent at 10,397.30 points
Paris – CAC 40: UP 0.1 percent at 8,438.27
Frankfurt – DAX: FLAT at 24,933.76
Tokyo – Nikkei 225: UP 1.7 percent at 71,053.49 (close)
Hong Kong – Hang Seng Index: DOWN 1.6 percent at 23,924.81 (close)
Shanghai – Composite: DOWN 0.4 percent at 4,090.48 (close)
New York – Dow: DOWN 1.0 percent at 51,492.55 (close)
Euro/dollar: DOWN at $1.1475, down from $1.1494 on Wednesday
Pound/dollar: DOWN at $1.3243, down from $1.3282
Dollar/yen: UP at 160.84 yen, up from 160.71 yen
Euro/pound: UP at 86.65 pence, up from 86.53 pence