S&P 500 hits record high as oil stays below $100

Summary

The S&P 500 closed at a fresh record high despite ongoing tensions involving Iran and continued disruption to shipping through the Strait of Hormuz. Brent crude rose but remained below $100 a barrel, even as analysts warned that global oil inventories are tightening. Nvidia remained in focus ahead of Jensen Huang’s Computex keynote, while Asian technology markets extended their AI-driven rally, led by semiconductor stocks including Samsung Electronics. The Dow Jones also reached a new closing high as investors largely looked past Middle East developments.

Equities

The FTSE 100 closed 0.2% lower on Friday but still secured a second consecutive monthly gain, ending May up around 0.3%. The FTSE 250 outperformed, rising 0.4% on the day and finishing the month 4.3% higher.

Ocado shares closed 7.1% higher after Asda agreed a deal with the online grocery technology group to modernise and expand its digital operations across the UK. The agreement provided a boost to confidence in Ocado’s technology platform and future growth prospects.

Energy stocks were mixed as oil prices weakened following reports that the United States and Iran had reached an agreement to extend a ceasefire and work towards reopening shipping routes through the Strait of Hormuz. Shares in Shell and BP ended the session in mixed territory, while the wider UK energy sector recorded its largest monthly decline in a year as crude prices eased.

Retailers came under pressure after Deutsche Bank downgraded several stocks in the sector. B&M, Currys, Dunelm and Wickes all closed lower, with declines ranging between 0.9% and 2.4%, as the broker cited softer consumer spending trends and weaker confidence among households.

Comments from Bank of England Governor Andrew Bailey also remained in focus. Bailey said allowing inflation to remain above the Bank’s 2% target was justified given current economic uncertainty and reiterated that policymakers had effectively removed the prospect of interest rate cuts. Financial markets are now pricing in at least one quarter-point rate increase before the end of the year.

In the United States, Wall Street ended the week at fresh record closing highs. The Dow Jones Industrial Average rose 0.7% to 51,032.34, the S&P 500 gained 0.2% to 7,580.07 and the Nasdaq Composite added 0.2% to 26,972.62. All three indices also posted gains for both the week and the month.

Technology stocks led the advance after Dell Technologies delivered stronger guidance. Dell shares surged 32.8% after raising its full-year profit and revenue forecasts, helping lift sentiment across the technology sector. Hewlett Packard Enterprise climbed 12.6%, Super Micro Computer gained 11.6% and Microsoft advanced 5.4%.

The software and services sector rose more than 6%, recovering all of its losses since late January. Communications stocks lagged after Alphabet fell 2.5%, while consumer staples weakened as Costco dropped 3.9% and Walmart lost 2.6%.

Gap shares tumbled 15.4% after the retailer reduced its annual sales forecast. American Eagle Outfitters fell 11.8% after leaving its annual comparable sales outlook unchanged. Automakers also weakened, with General Motors down 1.3% and Stellantis falling 2.7% amid reports that the Trump administration wants stricter North American content requirements for vehicles qualifying under the US-Mexico-Canada trade agreement.

Forex & Commodities

The US dollar was little changed early on Monday as investors awaited developments in the Middle East and further guidance from major central banks. The dollar index stood at 99.05, while the euro slipped to $1.164. Sterling edged lower to $1.345, the yen weakened to ¥159.5 per dollar, the Australian dollar held at $0.7182 and the New Zealand dollar fell to $0.5968.

Gold prices moved lower early on Monday, with spot gold trading at $4,521 per ounce after reaching a two-week high in the previous session. The stronger US dollar weighed on the precious metal, while traders monitored President Donald Trump's expected decision on a proposal to extend the ceasefire between the United States and Iran. Silver rose to $75.81 per ounce, platinum gained to $1,945 and palladium advanced to $1,373.

Oil prices climbed after renewed military action involving the United States, Iran and Israel increased concerns about energy supplies. Brent crude rose to $93.17 per barrel, while US crude traded at $89.65. Markets also remained focused on the Strait of Hormuz, with reports suggesting continued risks to shipping through one of the world's most important oil transit routes.

Central bank developments remained in focus. Federal Reserve Vice Chair Michelle Bowman said last week that higher energy prices linked to the Middle East conflict could create more persistent inflation pressures and potentially require tighter monetary policy. Markets are now weighing the possibility of a US interest-rate increase later this year.