Oil Prices Surge After Iran Downplays Israeli Attack: Market Reactions and Analysis

The Nasdaq Composite Index fell for a sixth straight session on Friday, on track for its longest losing streak in more than a year. The move down comes with Nvidia declining 10%, which adds to recent market problems related to geopolitical conflict and persistent inflation.

The Nasdaq index, which is dominated by technology stocks, fell 2.3%, while the broader Standard & Poor’s index fell.

It fell 1.1% to below the 5,000 point level. Both were poised for their sixth consecutive negative day, streaks not seen for either since October 2022.

The Dow Jones industrial average rose 147 points, or 0.4%, supported by a more than 5% rise in American Express after earnings.

Netflix fell more than 9% even after quarterly profits surpassed record highs and lows. The number of subscribers to the streaming service jumped 16% from the previous year, but it said it would no longer announce paid subscriptions starting in 2025.

Chip stocks Nvidia and Super Micro Computer also came under increasing pressure in afternoon trading, a sign that investors were moving out of the sector in a bull market. The preferred AI levels dropped by more than 10% and 20%, respectively.

While technology weighed on the market, investors’ concerns about escalating conflict in the Middle East as a result of Israel’s limited strike on Iran appeared to have been largely eased after Friday’s open.

European stock markets closed lower on Friday but avoided hitting their lowest levels in more than a month as worries about escalating tensions in the Middle East eased, while French cosmetics giant L’Oreal its best daily performance since early January after strong results.

Europe’s STOXX 600 index closed down 0.1 percent, but recorded its biggest weekly decline since mid-January by about 1.2 percent, as renewed focus on geopolitical tensions pushed investors away from assets high risk, as well as the decline in technology company stocks.

L’Oreal shares jumped five percent after the cosmetics company recorded a nearly 10 percent increase in first-quarter sales year-on-year.

Shares of Schneider Electric fell 3.2 percent at a time when the French company is in talks with Bentley Systems, an American company that makes engineering software, regarding a “strategic agreement.”

The markets are preparing for the release of corporate business results in the coming weeks, and first-quarter profits are expected to decline by about 12.1 percent annually, according to data from the London Stock Exchange on Tuesday.

Volvo shares fell 4.1 percent after Geely Holding, Volvo’s second-largest shareholder, sold part of its stake in the Swedish truck maker.

The technology sector index fell 1.7 percent, with Swiss Comet Holding shares losing 3.4 percent after first-quarter results.

Contributing to the stabilization of the markets were statements by the President of the European Central Bank, Christine Lagarde, that inflation in the euro zone is likely to decrease at a faster pace, and that interest rates may be reduced if the bank’s price target is met.

Oil prices rose slightly on Friday, but suffered a weekly loss after Iran downplayed suspected Israeli attacks on its territory, a sign that an escalation of hostilities in the Middle East could be averted.

Brent crude futures rose 18 cents, or 0.21 percent, to settle at $87.29 a barrel. US West Texas Intermediate futures for May delivery rose 41 cents, or 0.5 percent, to settle at $83.14 a barrel.

The most actively traded futures contract for June delivery rose 12 cents to $82.22 a barrel.

Both benchmarks rose more than three dollars a barrel earlier in the session after explosions were heard in the Iranian city of Isfahan in what sources described as an Israeli attack. but the gains dwindled after Tehran downplayed the incident and indicated it had no plans. answer

“It was just a big show, so the markets fell as quickly as they rose,” said Tim Snyder, an economist at Matador Economics. Investors were closely watching Israel’s response to Iranian drone and missile attacks on April 13, which came in response to a suspected Israeli airstrike on April 1 on the Iranian embassy compound in Damascus.

US lawmakers included sanctions on Iranian oil exports as part of an upcoming aid package for Ukraine following Iran’s attack on Israel over the weekend .

Reuters data shows that Iran is the third largest oil producing country in the Organization of the Petroleum Exporting Countries (OPEC). The media reported on Friday that the International Monetary Fund expects the OPEC+ alliance to start increasing oil production starting in July. Prices have fallen about three percent since Monday, and both benchmarks recorded their biggest weekly losses since February.