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Stocks rally as Iran talks hopes offset inflation worries

Global equity markets extended gains on Wednesday as signs of possible renewed talks between Washington and Tehran eased geopolitical tensions and helped push oil prices lower, even as US wholesale inflation accelerated. US equities advanced on Tuesday, led by technology stocks, with the S&P 500 and Nasdaq 100 recovering all losses since the start of the Iran conflict, while Asian markets followed higher, supported by strong demand for AI-related chipmakers in Korea. US producer price data showed the fastest annual increase in three years, keeping inflation risks on the radar ahead of further remarks from Federal Reserve and European Central Bank officials.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

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Crude oil prices fell on Tuesday as markets weighed the prospect of renewed talks between Washington and Tehran. A White House official said a second round of US-Iran negotiations was under consideration, with US President Donald Trump later indicating discussions could take place in Islamabad over the next two days, ahead of the expiry of a fragile ceasefire. Gold prices were slightly weaker, trading around USD 4830 per ounce on Wednesday, while silver was modestly higher. US Treasury yields edged lower across the curve, with the 2-year, 10-year and 30-year maturities trading around 3.7%, 4.2% and 4.9%, respectively. The US dollar was essentially unchanged versus major currencies, while bitcoin stabilised after recent gains at around USD 74,000.

Asia stocks rise on tech gains and Iran hopes

Asian equity markets advanced on Wednesday, with technology shares following strong gains on Wall Street. Nikkei 225 was trading 0.5% higher, while Korea’s Kospi outperformed, climbing 2.6% as Korean memory chipmakers such as SK Hynix and Samsung Electronics rallied on expectations of sustained artificial-intelligence-related demand. Australia’s S&P/ASX 200 was little changed, trading just 0.1% higher. Hong Kong’s Hang Seng Index was up 0.5% and mainland China’s CSI 300 was trading essentially flat, while India’s Nifty 50 was 1.6% higher. Investor sentiment was supported by signs from Washington that talks with Iran could resume despite continued tensions, including a US naval blockade of Iranian shipping and threats from Tehran against neighbouring Gulf ports after talks at the weekend collapsed.

US equities rise on Iran talks hopes

US stock indices extended their gains on Tuesday as prospects for further peace talks between the United States and Iran eased tensions in the Persian Gulf, pushing oil prices lower and reducing inflation worries. The Dow Jones Industrial Average rose 0.7% while the broader S&P 500 advanced 1.2% and the technology-heavy Nasdaq 100 climbed 1.8%, with the latter two having already erased losses incurred since the outbreak of the Iran conflict at the end of February. Early in the US reporting season, shares of major banks reacted mixed to first-quarter results, with JPMorgan slipping despite stronger trading income, Citigroup advancing on robust markets activity, and Wells Fargo falling sharply after disappointing net interest income.

US wholesale inflation hits three-year high

US producer prices increased 4% year-on-year in March, the fastest pace in three years, as higher oil costs pushed the Producer Price Index (PPI) 0.5% above February’s level, matching the previous month’s gain, according to data released Tuesday. A surge of 15.7% in gasoline prices accounted for nearly half of the monthly increase, although falling food prices and unchanged services costs helped limit overall gains. Core PPI, which excludes food and energy, rose 0.1% on the month and held steady at 3.8% annually. The data snapshot was taken in mid-March, only about two weeks after US-Israeli strikes in Iran began. The figures follow a recent Consumer Price Index report showing a 0.9% monthly and 3.3% annual rise in consumer prices and are being closely watched as PPI feeds into the Federal Reserve’s preferred Personal Consumption Expenditures price index, where components such as airfare climbed 4.1% in March.

ECB cautious on rates amid Iran war fallout

European Central Bank President Christine Lagarde said on Tuesday that policymakers have not yet decided whether to raise interest rates, as the economic impact of the Iran war on the euro area remains uncertain. While markets have been speculating about imminent rate hikes due to higher fuel costs from the closure of the Strait of Hormuz, Lagarde stressed it was too early to draw firm conclusions and pushed back against colleagues signalling clear policy moves. She noted that the euro-area economy currently lies between the ECB’s baseline and adverse scenarios, which traders may interpret as reducing the likelihood of a near-term rate increase, even though a severe scenario foresees inflation rising to 4.8% next year. The Euro Stoxx 50 advanced 1.3% to 5983.25 points, while Germany’s DAX gained 1.3% to 24,044.22 points, France’s CAC 40 rose 1.1% to 8327.86 points and the Swiss Market Index added 0.9% to 13,268.23 points.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from ASML, Bank of America, Hermes International, Morgan Stanley, Progressive, and Sika.

Economic data in focus: euro-area manufacturing production (11:00), Empire State Manufacturing Index (14:30), Swiss National Bank Chairman Martin Schlegel speaks (19:00), US Fed Beige Book (20:00) and European Central Bank President Christine Lagarde speaks (21:30).

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Editor: Alessandro Fezzi
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