U.S. Stocks Edge Higher as Investors Weigh Prospects for U.S.-Iran Deal
U.S. stocks opened slightly higher Tuesday as signs emerged that the parties could reach an agreement and reopen the Strait of Hormuz. Investors remained cautious, however, and were uncertain whether the United States and Iran could reach a broader resolution to the conflict. The Dow Jones Industrial Average rose 0.22%, the S&P 500 gained 0.13% and the Nasdaq Composite advanced 0.23%. With the outlook for the conflict in the Middle East still unclear, international oil prices remained relatively steady in volatile trading. Iran said it could reach an agreement with Oman to resume shipping through the Strait of Hormuz. Tehran continued to insist, however, that it would not hold direct talks with the United States until multiple conditions were met. Iranian Foreign Minister Abbas Araghchi said Sunday, according to the semi-official Tasnim News Agency, that restarting U.S.-Iran negotiations would have “no possibility” as long as the United States continued to violate a June memorandum of understanding and failed to compensate Iran for the alleged breach. West Texas Intermediate crude futures edged lower to $82 a barrel, while the international benchmark Brent crude also dipped slightly to $87 a barrel. In Asia, South Korea’s Kospi closed up 0.73% and Australia’s S&P/ASX 200 rose 0.19%. Hong Kong’s Hang Seng Index fell 1.03%, while mainland China’s CSI 300 declined 0.79%. Japanese markets were closed for a holiday. European stocks edged higher as investor optimism that the Strait of Hormuz would reopen in the short term faded. London’s FTSE 100, France’s CAC 40 and Germany’s DAX briefly turned lower after opening. Nvidia bonds face renewed selling Nvidia said overnight that it had worked with six large financial institutions, including Apollo Global Management, to develop an artificial-intelligence infrastructure financing plan worth more than $500 billion. The supplied source text omits the names of the other institutions. Nvidia did not disclose further details, including the specific financing terms, the size of investment commitments or how the $500 billion would fit with existing financing arrangements. Tony Sycamore, an analyst at IG Markets, said: “I have some questions about whether this feels a bit like the period before the subprime crisis, when subprime mortgages were just becoming mainstream—a form of innovation that ultimately triggered a global financial crisis.” One sign of investor concern was renewed selling in Nvidia bonds. The yield on Nvidia’s 2% notes due in 2032 rose to 4.887% on the Tradegate platform, up nearly 7 basis points from Monday. The source also says that $20 billion was raised through a stock offering, the company’s first since its 1971 listing, but the supplied text does not identify the issuer. Intel rose about 1%. Data tracked by Bloomberg Intelligence showed that second-quarter earnings per share at S&P 500 companies grew about 32% from a year earlier, compared with 30% profit growth in the previous quarter. The market expects corporate earnings growth to remain above 20% over the next two quarters. A strategy team led by Savita Subramanian said such a strong earnings-growth cycle was very rare, with similar performance occurring only 10 times since 1936. Markets will next focus on key inflation data. The U.S. consumer price index for July is due Wednesday, followed by the producer price index on Thursday. With weaker-than-expected nonfarm payrolls adding uncertainty to the Federal Reserve’s policy outlook, the inflation data will be particularly significant. The inflation figures could leave the Federal Reserve facing a dilemma. A rebound in oil prices has renewed concerns about inflationary pressure, while a sharp slowdown in job growth has prompted questions about the resilience of household consumption and the broader economy. Dennis Vollmer, chief investment officer at Montes Financial, said: “I expect the CPI to continue its downward trend, which would further support the Federal Reserve keeping interest rates unchanged rather than raising them. Last Friday’s weak employment report will not change that central view.” He added: “Services inflation remains sticky, but the sector is less sensitive to interest rates, making it unlikely to undermine the case for keeping policy unchanged.”
The Dow Jones Industrial Average rose 0.22%, the S&P 500 gained 0.13% and the Nasdaq Composite advanced 0.23%. With the outlook for the conflict in the Middle East still unclear, international oil prices remained relatively steady in volatile trading.
Iran said it could reach an agreement with Oman to resume shipping through the Strait of Hormuz. Tehran continued to insist, however, that it would not hold direct talks with the United States until multiple conditions were met.
Iranian Foreign Minister Abbas Araghchi said Sunday, according to the semi-official Tasnim News Agency, that restarting U.S.-Iran negotiations would have “no possibility” as long as the United States continued to violate a June memorandum of understanding and failed to compensate Iran for the alleged breach.
West Texas Intermediate crude futures edged lower to $82 a barrel, while the international benchmark Brent crude also dipped slightly to $87 a barrel.
In Asia, South Korea’s Kospi closed up 0.73% and Australia’s S&P/ASX 200 rose 0.19%. Hong Kong’s Hang Seng Index fell 1.03%, while mainland China’s CSI 300 declined 0.79%. Japanese markets were closed for a holiday.
European stocks edged higher as investor optimism that the Strait of Hormuz would reopen in the short term faded. London’s FTSE 100, France’s CAC 40 and Germany’s DAX briefly turned lower after opening.
Nvidia bonds face renewed selling
Nvidia said overnight that it had worked with six large financial institutions, including Apollo Global Management, to develop an artificial-intelligence infrastructure financing plan worth more than $500 billion. The supplied source text omits the names of the other institutions.
Nvidia did not disclose further details, including the specific financing terms, the size of investment commitments or how the $500 billion would fit with existing financing arrangements.
Tony Sycamore, an analyst at IG Markets, said: “I have some questions about whether this feels a bit like the period before the subprime crisis, when subprime mortgages were just becoming mainstream—a form of innovation that ultimately triggered a global financial crisis.”
One sign of investor concern was renewed selling in Nvidia bonds. The yield on Nvidia’s 2% notes due in 2032 rose to 4.887% on the Tradegate platform, up nearly 7 basis points from Monday.
The source also says that $20 billion was raised through a stock offering, the company’s first since its 1971 listing, but the supplied text does not identify the issuer. Intel rose about 1%.
Data tracked by Bloomberg Intelligence showed that second-quarter earnings per share at S&P 500 companies grew about 32% from a year earlier, compared with 30% profit growth in the previous quarter. The market expects corporate earnings growth to remain above 20% over the next two quarters.
A strategy team led by Savita Subramanian said such a strong earnings-growth cycle was very rare, with similar performance occurring only 10 times since 1936.
Markets will next focus on key inflation data. The U.S. consumer price index for July is due Wednesday, followed by the producer price index on Thursday. With weaker-than-expected nonfarm payrolls adding uncertainty to the Federal Reserve’s policy outlook, the inflation data will be particularly significant.
The inflation figures could leave the Federal Reserve facing a dilemma. A rebound in oil prices has renewed concerns about inflationary pressure, while a sharp slowdown in job growth has prompted questions about the resilience of household consumption and the broader economy.
Dennis Vollmer, chief investment officer at Montes Financial, said: “I expect the CPI to continue its downward trend, which would further support the Federal Reserve keeping interest rates unchanged rather than raising them. Last Friday’s weak employment report will not change that central view.”
He added: “Services inflation remains sticky, but the sector is less sensitive to interest rates, making it unlikely to undermine the case for keeping policy unchanged.”