Market Overview
US equity markets staged a broad rebound, snapping four consecutive sessions of declines, as crude oil prices retreated. This easing of inflationary pressures supported investor sentiment despite firming expectations for a Federal Reserve rate hike next week. The Dow Jones Industrial Average gained 0.98% to close at 52,573.29, the S&P 500 climbed 0.86% to 7,656.98, and the Nasdaq Composite advanced 0.96% to 26,333.04.
Individual tech stocks saw notable movements, with Dell Technologies soaring after an “Outperform” rating and Hewlett Packard Enterprise also registering a significant jump.
Markets
Crude oil prices saw a significant retreat, with Brent crude falling 2.81% to $104.61 per barrel and WTI crude dropping 2.37% to $100.05 per barrel. Gold prices edged up 0.04% to $4,366.20.
In the bond market, US Treasury yields were mixed. The 10-year Treasury yield rose 3.10 basis points to 4.97%, while the 30-year Treasury yield eased 0.70 basis points to 5.35%. Market expectations for a Federal Reserve rate hike next week have firmed to 85.6%.
Currency markets saw the Australian Dollar weaken by 0.90% against the USD, trading at 0.7156. The US Dollar Index recorded a slight gain of 0.03% to 99.12.
Earlier on Friday, Asia-Pacific markets generally closed lower. Japan’s Nikkei 225 was down 1.93% at 64,011.34, South Korea’s KOSPI fell 1.76% to 6,909.91, and Australia’s ASX 200 closed 0.89% lower at 8,741.20. The Shanghai Composite also declined by 1.18% to 3,888.11.
What Drove Markets
The broad rally in US equities was primarily attributed to the retreat in crude oil prices, which alleviated some inflation concerns. This decline followed reports of Iran planning a meeting with Gulf states in Oman to discuss the Strait of Hormuz, alongside Saudi Arabia’s precautionary shutdown of its East-West crude oil pipeline after attacks.
Technology and credit-sensitive sectors led the gains in equities. Dell Technologies surged after RBC initiated coverage with an “Outperform” rating, citing its strong position in AI infrastructure. Hewlett Packard Enterprise also experienced a notable increase. Despite its strong first-quarter results and substantial AI cloud contracts, Oracle’s post-earnings rally fizzled.
In the bond market, the latest US CPI report, which showed core inflation slightly above estimates, contributed to the increased probability of a quarter-point Fed rate hike next week.
Stocks to Watch
Dell Technologies (DELL) soared 11.98% to $567.29, reaching an all-time high after RBC initiated coverage with an “Outperform” rating, highlighting its strong position in AI infrastructure.
Hewlett Packard Enterprise (HPE) jumped 12.44% to $62.09, also benefiting from positive sentiment in the tech sector.
Oracle (ORCL) closed down 1.74% at $150.28. Its post-earnings rally fizzled despite reporting stronger-than-expected first-quarter results and substantial AI cloud contracts.
AMD (AMD) advanced 2.49% to $516.13.
In Australia, miners BHP (BHP.AX) and Rio Tinto (RIO.AX) both saw declines of over 3.5%, falling 4.05% and 3.54% respectively.