S&P 500 Rises as Dollar Falls on Iran Hopes

The S&P 500 pushed higher late on Monday as optimism over potential US–Iran progress lifted sentiment, while the US dollar weakened and sterling climbed to around 1.352. The FTSE 100 slipped modestly, with gains in Shell and BP offset by declines in airlines and healthcare names. Oil prices fell back below $100 early Tuesday, and gold edged higher near 4,770 as the softer dollar supported demand. Asian equities also moved higher as dialogue between Washington and Tehran remained open.

Equities

The FTSE 100 closed 0.2% lower on Monday, marking a third consecutive decline as uncertainty around the Middle East conflict weighed on markets. The FTSE 250 also fell 0.3%, with rising oil prices and failed US–Iran talks keeping investors cautious.

Energy stocks moved higher, with Shell closing 1.5% up and BP rising 0.9% by the end of trading. In contrast, healthcare names came under pressure, with AstraZeneca down 1.6% and Haleon slipping 1%. Travel stocks also declined as higher fuel costs weighed on the sector, with EasyJet falling 2.4% and Wizz Air dropping 5.4% after a broker downgrade. Carnival lost 3.4%. Fintech group Wise stood out, closing 6.5% higher after reporting a 26% rise in fourth-quarter cross-border transaction volumes. Housebuilder Vistry fell 3.8% despite appointing Adam Daniels as chief executive.

In the United States, markets moved higher late on Monday. The S&P 500 closed up 1.02%, the Nasdaq gained 1.23% and the Dow Jones rose 0.63%, as investors focused on hopes for progress in US–Iran discussions. Technology stocks led the gains, with Microsoft closing 3.6% higher and Oracle surging 12.7%, making it the strongest performer in the S&P 500.

Goldman Sachs fell 1.9% by the close despite reporting a profit beat, as weaker trading revenues in fixed income and currencies weighed on sentiment. Investors are now looking ahead to results from JPMorgan, Citi and Wells Fargo due on Tuesday.

Elsewhere, Sandisk jumped 11.8% as it is set to join the Nasdaq-100 index later this month. Albemarle rose 6.8% after a price target upgrade, while Allogene Therapeutics gained 12.5% following positive clinical trial data. Airline stocks moved lower, with Delta Air Lines and United Airlines both down more than 1% and American Airlines falling 0.8% as oil prices remained elevated.

Forex & Commodities

The US dollar weakened further early on Tuesday, edging towards a seventh consecutive daily decline as expectations of progress in talks between Washington and Tehran improved sentiment. It traded down at 159.0 yen and held broadly steady against the euro at 1.177, while the dollar index hovered near 98.31, close to its lowest level since early March. Sterling strengthened, rising to around 1.352 against the dollar, reaching its highest level in more than six weeks.

The Australian dollar moved higher towards 0.7100 and the New Zealand dollar held firm near 0.5871 in early trading, supported by the softer US currency. The yen remained under pressure despite the weaker dollar, with concerns that elevated oil prices could worsen Japan’s trade balance. Market pricing for a Bank of Japan rate increase later this month has fallen sharply, with expectations dropping to around one-third, reflecting uncertainty around the economic outlook.

Gold prices moved higher early on Tuesday, supported by the softer dollar and easing oil prices. Spot gold traded at approximately 4,770 per ounce after rebounding from a recent one-week low, as lower energy prices reduced immediate inflation concerns while ongoing geopolitical risks continued to support demand.

Oil prices declined in Asian trading after recent gains, as hopes for renewed dialogue between the United States and Iran helped ease concerns over prolonged supply disruptions. Brent crude traded around 98.57 per barrel, while US crude stood near 97.45, both below the $100 level. This followed a sharp rise in the previous session after the US imposed a blockade on Iranian ports, disrupting flows through the Strait of Hormuz.