By Mike Dolan
April 22 (Reuters) –
What matters in U.S. and global markets today
By Mike Dolan, Editor-at-Large, Finance and Markets
President Donald Trump unilaterally extended the Iran war ceasefire beyond Wednesday’s deadline, but it’s not clear whether anyone else involved in the conflict has agreed. That partly explains why crude oil prices have not reacted significantly in response to what would otherwise be seen as a relief signal.
I’ll get into that and more below.
But first, check out my latest column on why Kevin Warsh may struggle to please President Trump as Fed Chair.
And listen to the latest episode of the Morning Bid daily podcast, where I discuss oil’s reaction to the ceasefire extension and more.
Finally, don’t forget to mark April 23 in your calendar, when I’ll be joining my ROI colleague Jamie McGeever for a timely webinar discussion on rethinking safe-haven assets in uncertain times. Sign up here.
ANOTHER DEADLINE DODGED
Brent crude prices edged up on Wednesday to just under $100 per barrel, while WTI crude traded at around $91/bbl. Iran has claimed that the U.S. blockade of its ports, which Trump said would continue, is a breach of the ceasefire and that the Strait of Hormuz would remain closed as a result.
There are reports of cargo ships in the waterway being fired upon again this morning, and it’s unclear when – or if – fresh talks between the two sides will commence.
Nevertheless, world stock markets and Wall Street futures are more upbeat about an eventual de-escalation – as they have been for most of the past week – and are looking elsewhere for direction.
Most obviously, they’re looking in the effervescent tech space. South Korean, Japanese and Taiwanese stocks continued to set new highs overnight, with Korea’s chip giant SK Hynix breaking into the top 20 of the world’s most valuable companies.
Tesla’s results after the bell tonight will likely focus on the firm’s energy and solar business, robotaxi plans and its proposed move into chip design. Intel, the big mover of the month, will also report on Thursday. A 50% stock price gain in April so far makes it one of the best months for the chip giant on record.
Wall Street index futures edged up ahead of Wednesday’s bell.
The other focus of the past 24 hours was Fed Chair nominee Kevin Warsh’s confirmation hearing in Congress. There were few big surprises, and Treasury markets and the dollar remained steady afterwards.
Warsh insisted he had not been asked by Trump to commit to interest rate cuts and concentrated instead on his plans for “regime change” in the Fed’s policymaking framework and his longer-term wish for the Fed’s balance sheet to be reduced.
Just before Warsh spoke, Trump said he would be disappointed if his new appointee did not deliver immediate rate cuts – but with price pressures back on the boil, that looks like a distant hope. Markets see less than a 50% chance of the Fed resuming easing for the rest of the year.
Meanwhile, March U.S. retail sales were up more than forecast, even when big gas pump receipts are stripped out. The broader economy seems to have weathered the oil shock so far – at least for one month.
Elsewhere, UK inflation for March came in higher than expected – rising to 3.3% from 3.0% the prior month – but core prices excluding energy were more subdued.
Chart of the day
Shares in U.S. chipmaker Intel have soared more than 50% in the past month and have more than trebled in the past year as demand for its chips and servers soars amid the worldwide AI buildout, and after the U.S. government and Nvidia took stakes in the once-struggling firm last year.
Intel is due to report earnings on Thursday amid fears of a chip shortage – but this month it expanded its AI CPU partnership with Google and joined Elon Musk’s Terafab AI chip complex project to make processors.
Today’s events to watch
* U.S. 20-year bond auction (1 p.m. EDT)
* U.S. corporate earnings: Tesla, IBM, Moody’s
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(By Mike Dolan; Editing by Toby Chopra)
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