(May 21): A slide in oil prices lifted stocks and bonds on Wednesday amid hopes for a deal to end a war that has rattled financial markets and fuelled inflation worries. In late hours, Nvidia Corp whipsawed after its results.
US crude fell to around US$98 a barrel on a report that President Donald Trump said Washington is in the “final stages” with Tehran. The S&P 500 rose 1.1%. Yields on long-dated Treasuries slid from the highest since 2007. Nvidia delivered a sales forecast that drew a tepid reaction from investors, even as revenue from data centre operators continued to surge.
Trump said “we will see what happens” with Iran, adding that a deal will be made or “we are going to do some things that are a little bit nasty, but hopefully that won’t happen”, according to a White House pool report.
Iran is reviewing the US’ new draft in response to Tehran’s 14-point proposal and is yet to give a response, Tasnim reported. President Masoud Pezeshkian posted on X that Iran has “explored every avenue to avert war”, adding that “all paths remain open from our side”.
“Everyone wants to see this end, but negotiations so far have been far apart on key issues, with both sides expecting each other to blink first,” said veteran strategist Louis Navellier. “Even if a deal is struck, it may take some time to be sure it won’t be violated for things to fully return to normal.”
Wall Street’s rebound came after a decline driven by fears that a war-driven jump in energy costs would fuel price pressures. A record of the US Federal Reserve’s latest policy meeting showed a majority of officials warned the central bank would likely need to consider raising rates if inflation continued to run persistently above their target.
See also: US stocks fall as Fed-hike anxiety lifts bond yields
Despite the equity-market gains on Wednesday, it’s worth noting that it was not the first time optimism took hold even without any visible signs of progress in negotiations between the US and Iran.
“We have our usual hopes that today’s comments about the final stages of the war prove to be true, though we retain our now-well-earned scepticism that it will be the case immediately,” said Steve Sosnick at Interactive Brokers.
With so much uncertainty around the impacts of the conflict, traders were eagerly awaiting Nvidia’s results for some reassurance on the outlook for AI that has driven the market rally from this year’s lows.
See also: US stocks extend declines as yields climb; software shares gain
Sales in the three months ending in July will be about US$91 billion, the chipmaker said. Though analysts estimated US$87 billion on average, projections ranged as high as US$96 billion, according to data compiled by Bloomberg. Nvidia also increased its quarterly dividend to 25 cents a share from a penny and announced US$80 billion in stock repurchases.
Uploaded by Isabelle Francis
