Middle East Tensions Weigh on Markets

AFP/APP 

New York: Wall Street stocks tumbled on Friday despite solid bank earnings as oil and gold prices shot up amid worries about a potential widening of conflict in the Middle East.

After spending the entire session in the red, the Dow Jones Industrial Average finished down 1.2 percent, or 475 points, at 37,983.24.

“Heightened geopolitical uncertainty in front of a weekend contributed to today’s sell-off,” said Briefing.com.

Market watchers cited worries about an imminent attack on Israel by Iran to retaliate for a strike in Damascus, a possibility also raised by President Joe Biden, who urged Iran against the move.

Oil prices surged more than two percent at session peaks before easing somewhat.

Gold also benefited from its status as a haven investment, breaking the $2,400 per ounce level.

Investor attention was set to focus on the start of the corporate earnings season on Friday after economic data released earlier this week largely killed off the possibility that the US Federal Reserve could begin cutting interest rates in June.

Equity markets took the recalibration of expectations of interest rate cuts in stride as the data showing the US economy in strong health raised hopes that companies would report strong earnings.

At the start of the year, markets had priced in six interest cuts by the Fed in 2024, but now expect only two.

JPMorgan Chase, Wells Fargo, and Citigroup all reported better-than-expected earnings results for the first quarter. But shares in JPMorgan Chase, which have risen strongly this year, sank 6.5 percent, while the other two banks retreated by less.

While Paris and Frankfurt edged lower, London stocks fizzed higher on data showing the UK economy grew for a second straight month in February, further fueling recovery hopes after sliding into a shallow recession in the second half of last year.

Dimming hopes for US rate cuts continued to support the dollar, which surged to another 34-year high above 153 yen, putting Japanese officials in the spotlight after they said they were ready to intervene in markets to support their currency.

Key figures near 2030 GMT

New York – Dow: DOWN 1.2 percent at 37,983.24 (close)

New York – S&P 500: DOWN 1.5 percent at 5,123.41 (close)

New York-NNasdaq Composite: DOWN 1.6 percent at 16,175.09 (close)

London – FTSE 100: UP 0.9 percent at 7,995.58 (close) 

Paris-CCAC 40: DOWN 0.2 percent at 8,010.32 (close)

Frankfurt – DAX: DOWN 0.1 percent at 17,930.32 (close)

EURO STOXX 50: DOWN 0.2 percent at 4,955.01 (close)

Tokyo-NNikkei 225: UP 0.2 percent at 39,523.55 (close)

Hong Kong-HHang Seng Index: DOWN 2.2 percent at 16,721.69 (close)

Shanghai Composite: DOWN 0.5 percent at 3,019.47 (close)

Dollar/yen: DOWN at 153.24 yen from 153.27 yen on Thursday

Euro/dollar: DOWN at $1.0645 from $1.0726 

Pound/dollar: DOWN at $1.2449 from $1.2553

Euro/pound: UP at 85.48 pence from 85.44 pence

Brent North Sea Crude: UP 0.8 percent at $90.45 per barrel

 West Texas Intermediate: UP 0.8 percent at $85.66 per barrel