Oil at $125 Lifts Dollar as Alphabet Jumps

Brent crude oil surged towards $125 per barrel, supporting a stronger US dollar while pushing the yen beyond 160 against it. The S&P 500 ended little changed, with tech sentiment holding firm as Alphabet rallied strongly afterhours, while Meta fell. In London, the FTSE 100 declined, with AstraZeneca, GSK and Lloyds all weaker, while DCC rose on takeover interest. Gold edged higher but remained under pressure from higher rate expectations.

Equities

The FTSE 100 fell 1.2% on Wednesday, marking its seventh decline in eight sessions and closing at a one-month low, while the FTSE 250 dropped 1%. Investors reacted cautiously to mixed corporate earnings and ongoing geopolitical tensions linked to Iran, alongside anticipation of central bank decisions in the US and UK.

In London trading, AstraZeneca slipped 1.5% and GSK fell 5.4% after both companies maintained their full-year forecasts despite reporting better-than-expected quarterly profits. Lloyds Banking Group declined 1.5% even after posting stronger-than-expected first-quarter earnings. DCC rose 9.3% following news it is reviewing a takeover approach from a consortium including KKR and Energy Capital Partners. St. James's Place dropped 6% after reporting lower net inflows year-on-year.

On Wall Street, the Dow Jones Industrial Average closed down 0.57%, while the S&P 500 edged 0.04% lower and the Nasdaq Composite gained 0.04% by the close on Wednesday. Markets moved unevenly after the Federal Reserve held interest rates steady in a divided decision, while rising oil prices added pressure.

After the closing bell, shares in Alphabet rose more than 3% in after-hours trading, while Amazon and Microsoft fell over 3%, and Meta Platforms dropped more than 6% following earnings releases. Earlier in the session, Starbucks closed 8.5% higher after lifting its annual forecast, while Visa rose 8.3% on improved full-year guidance.

NXP Semiconductors surged 25.5% after issuing strong revenue expectations, and Seagate Technology jumped 11.1% on an upbeat forecast, lifting Western Digital and SanDisk by over 5%. Robinhood Markets fell 13.2% after missing profit expectations.

Forex & Commodities

The US dollar strengthened early on Thursday, reaching its highest level in over two weeks as firmer US yields supported demand. The euro weakened to $1.166, while sterling edged down to $1.346 against the dollar. The Japanese yen weakened sharply beyond 160.6 per dollar, leaving it close to levels that have previously prompted intervention from Japanese authorities.

This currency move followed the latest decision from the Federal Reserve on Wednesday evening, where policymakers held interest rates steady in an 8–4 vote, the most divided outcome in decades. The central bank signalled rising concern about inflation, and markets have since scaled back expectations for rate cuts this year, with some now pricing in a possibility of future tightening.

Gold edged higher to $4567 per ounce early on Thursday after recent losses, though it remains on track for a second consecutive monthly decline. Elevated interest rate expectations have reduced its appeal, despite some support from dip-buying.

Other central banks are also in focus, with the Bank of England and the European Central Bank due to announce policy decisions later on Thursday. Investors are watching closely for any shift in guidance, particularly as rising energy prices increase pressure on inflation expectations across major economies.

Brent crude oil rose strongly early on Thursday, trading at $124.8 per barrel after climbing sharply in the previous session. Prices have reached their highest levels since March 2022 amid concerns over prolonged supply disruption linked to tensions involving Iran and restricted shipping through the Strait of Hormuz.