S&P 500 Hits Record High as Oil Slides

The S&P 500 and Nasdaq closed at record highs after reports that the US and Iran had agreed to extend a ceasefire, while the Dow Jones Industrial Average also reached a fresh closing high. Oil prices fell sharply this week, with Brent crude dropping below $93 a barrel as traders assessed the prospect of the Strait of Hormuz reopening. Snowflake surged after raising guidance and announcing a major AI infrastructure agreement with Amazon Web Services, while Microsoft gained on reports it will launch a new coding model. The US dollar remained on track for a weekly decline, while sterling held near $1.344 against the dollar.

Equities

The FTSE 100 fell 0.75% on Thursday to 10,425.96, ending a seven-session winning streak as renewed US-Iran military action weighed on sentiment. The FTSE 250 also slipped 0.26%, easing back from a near three-month high.

PPHE Hotel Group closed 22% higher on Thursday after confirming it had received a £920.9 million takeover proposal from Israel’s Fattal Hotel Group. BT Group finished 3.5% lower after reports that the UK government would oppose any attempt by Indian billionaire Sunil Bharti Mittal to increase his stake in the telecoms company. IQE fell 6% after the semiconductor manufacturer reported a decline in full-year adjusted core profit. BP shares were little changed after former chairman Albert Manifold stated he may have pushed strongly for change at the company but again denied any wrongdoing following his recent dismissal. Energy and defence stocks moved higher during the session as developments in the Middle East continued to influence trading.

In the United States, the S&P 500 and Nasdaq Composite both reached record closing highs on Thursday, while the Dow Jones Industrial Average also posted a fresh closing high. The S&P 500 gained 0.58% to 7,563.63, the Nasdaq rose 0.91% to 26,917.47 and the Dow added 0.05% to 50,668.97. Investor sentiment improved after reports that the US and Iran had reached a draft agreement to extend their ceasefire by 60 days, although the proposal still requires approval.

Forex & Commodities

The US dollar traded broadly steady early on Friday but remained on course for a weekly decline after reports that the United States and Iran had reached an agreement to extend their ceasefire and ease restrictions on shipping through the Strait of Hormuz. The dollar index was trading at 99.05, while the euro held near $1.164 and sterling was little changed at $1.344.

The New Zealand dollar moved higher to $0.5960, extending recent gains after comments from the country's central bank governor pointed to earlier and steeper interest-rate increases. The Australian dollar also edged up to $0.7165.

The Japanese yen traded at 159.3 against the US dollar on Friday morning, remaining close to levels that have previously prompted intervention by Japanese authorities. Fresh economic data showed Tokyo core inflation remained below the Bank of Japan’s 2% target for a fourth consecutive month in May, while factory output recovered during April. Economists said the figures still support expectations for a Bank of Japan interest-rate increase next month.