Oil Falls 2% on Trump’s Iran Deal Comments

Oil prices dropped 2% after former President Trump suggested a potential nuclear deal with Iran, raising hopes of increased supply. Alibaba tumbled over 5% after weak earnings dragged the Hang Seng index down 0.8%, while US producer price and retail sales data bolstered bond markets, lowering Treasury yields. The rally from the China-US trade truce is fading, and Walmart warned it will raise prices due to ongoing tariffs, signalling more pressure on US consumers.

Equities

The FTSE 100 rose 0.6% on Thursday, supported by stronger-than-expected GDP growth in the UK and gains across several blue-chip stocks. National Grid climbed 3% after its annual profit beat forecasts, offering a boost to sentiment around defensive shares. Hikma Pharmaceuticals led the index, up 7.4%, after unveiling a five-year revenue target of £5 billion by 2030. JD Sports gained 1.4% on reports that Dick’s Sporting Goods is nearing a deal to buy Footlocker, which would reshape competition in the sports retail space. Meanwhile, Sage fell 3.8% after it reported slower revenue growth in North America, putting pressure on the software firm’s outlook. The FTSE 250 added 0.1%, as broader market gains were held back by weakness in energy shares, which dropped 2.1% due to lower oil prices tied to speculation over a potential US-Iran nuclear agreement.
In the US, the S&P 500 rose 0.41% to close at 5,916.93 points, recovering more ground following April’s sell-off. The Dow Jones Industrial Average climbed 0.65% to 42,322.75, while the Nasdaq fell 0.18% to 19,112.32, weighed down by large-cap tech.
Cisco Systems jumped nearly 5% after raising its full-year forecast, citing strong demand driven by artificial intelligence. The company’s improved guidance reassured investors following a period of slower spending in the networking sector.
UnitedHealth Group dropped 11%, hitting a five-year low after a report from the Wall Street Journal revealed the Department of Justice is conducting a criminal investigation into potential Medicare fraud. UnitedHealth said it had not been contacted by prosecutors.
Amazon fell 2.4% as tariffs continued to cloud the outlook for consumer-facing businesses. Walmart eased 0.5% despite beating US comparable sales expectations in the first quarter. The retailer warned it would raise prices later this month due to tariffs and declined to give a second-quarter profit outlook, echoing a broader trend among US companies to withdraw or soften earnings guidance.

Forex & Commodities

The US dollar slipped 0.2% on Friday to 100.57 against a basket of currencies, following weaker-than-expected US inflation data. Producer prices unexpectedly fell in April, shortly after a softer-than-forecast rise in consumer prices earlier in the week. These figures strengthened expectations that the Federal Reserve will cut interest rates later this year, with markets now pricing in 57 basis points of reductions by December, up from 49 basis points earlier. The benchmark 10-year US Treasury yield eased to 4.42%, while the two-year yield dropped to 3.95%.
Sterling edged higher by 0.14% to $1.3325, supported by stronger UK GDP growth in the first quarter. The euro also gained, up 0.26% to $1.2130. Against the yen, the dollar fell 0.33% to 145.30. This came despite weaker GDP data from Japan and dovish comments from a Bank of Japan official, who said further rate hikes were unlikely until there was greater clarity on global trade.
Gold prices continued to fall, with spot gold down 0.8% at $3,213.56 an ounce. The metal is on track for a 3.3% weekly drop, its steepest since November 2024, amid reduced demand for safe-haven assets. Silver fell nearly 1% to $32.37 an ounce, platinum dropped 0.5% to $984.83, and palladium lost 1.2% to $956.43.
Oil prices were broadly steady. Brent crude slipped 1 cent to $64.52 a barrel, while US West Texas Intermediate rose 2 cents to $61.64. Both benchmarks were up 1% on the week, helped by a temporary US-China tariff truce. However, further gains were limited by the potential return of Iranian supply, as talks around a US-Iran nuclear deal progressed. The International Energy Agency raised its forecast for 2025 supply growth and projected a surplus next year, even as it slightly increased its demand outlook.