S&P 500 Hits Record as Oil Tops $100 Again

The S&P 500 reached a record close on Wednesday, supported by strong gains in technology shares, with GE Vernova and Micron Technology rising sharply. The FTSE 100 slipped as airlines fell on higher fuel costs, while BP advanced alongside oil. The US dollar strengthened to 98.68 as Brent crude climbed above $103, while gold eased to $4,711. Ongoing disruption in the Strait of Hormuz kept energy markets elevated.

Equities

The FTSE 100 closed 0.2% lower on Wednesday, with pressure from industrial and financial stocks as investors weighed continued uncertainty around the Iran ceasefire and rising inflation. The FTSE 250 ended the session flat. UK inflation rose to 3.3% in March from 3% in February, highlighting the growing impact of higher energy costs linked to tensions in the Strait of Hormuz.

Airline shares fell as oil prices climbed above $100 a barrel. British Airways owner IAG dropped 3.4% at the close on Wednesday, while EasyJet declined 2.8% and Wizz Air fell 1.6%, reflecting concerns over fuel costs. In contrast, oil majors moved higher, with BP gaining 1.6% and Shell rising 0.7% by the close, supported by stronger crude prices.

Mining stocks also advanced alongside higher metals prices. Fresnillo, Rio Tinto, Glencore and Anglo American each closed between 2% and 3% higher on Wednesday. In corporate updates, Reckitt fell 4.6% after missing quarterly revenue expectations, while Bunzl rose 2.1% following first-quarter revenue growth. Quilter climbed 5.1% after reporting record inflows of £3.1 billion, and JD Sports lost around 4% as chairman Andrew Higginson prepared to step down.

In the United States, equities rallied strongly on Wednesday, with the S&P 500 rising 1.05% to a record close, the Nasdaq gaining 1.64% to an all-time high, and the Dow Jones adding 0.69%. The gains followed confirmation of an extended ceasefire with Iran and continued strength in corporate earnings.

Technology shares led the advance, with Micron Technology jumping 8.48% to a record closing price. GE Vernova surged 13.75% after raising its full-year revenue forecast, while Boston Scientific climbed 8.99% following strong quarterly results. Boeing rose 5.53% after reporting a smaller-than-expected loss, providing the largest boost to the Dow.

United Airlines fell 5.58% at the close on Wednesday after issuing weaker profit guidance due to rising fuel costs. After the closing bell, Tesla gained 4.6% in after-hours trading following a surprise positive free cash flow result.

Forex & Commodities

The US dollar held firm early on Thursday near a one-and-a-half-week high, with the dollar index at 98.68. Demand for the currency remained supported as tensions between the United States and Iran persisted, with disruption in the Strait of Hormuz continuing to underpin energy prices.

The euro weakened to $1.170 early this morning, touching its lowest level since mid-April, while sterling edged down to $1.348. The Australian dollar slipped to $0.7147 and the New Zealand dollar fell to $0.5886. The Japanese yen traded at 159.6 per dollar, remaining close to levels that have previously prompted intervention concerns.

Oil prices extended gains early on Thursday as supply concerns intensified. Brent crude rose to $103.2 per barrel, maintaining levels above $100 reached on Wednesday, while US crude traded at $94.16. The move higher followed continued disruption to shipping through the Strait of Hormuz and ongoing restrictions linked to the US naval blockade and Iranian seizures of vessels.

Spot gold declined early this morning, falling to $4,711 per ounce as higher oil prices reinforced expectations of persistent inflation. The rise in energy costs has shifted expectations for interest rates, reducing the appeal of non-yielding assets such as gold.

Recent economic developments point to a more cautious outlook for monetary policy. A survey of economists indicates that the US Federal Reserve is now expected to delay any interest rate cuts for at least six months, reflecting renewed inflation pressures linked to energy markets. Market pricing now suggests only a limited chance of a rate cut by December.