Oil price up, local shares to bounce back; US markets steady

Oil prices are hovering just under $US100 ($141) per barrel but Australia’s sharemarket is expected to bounce back on opening after US stocks held steady overnight despite ceasefire talks failing to end the US and Israeli war with Iran.

Hope remains on Wall Street that both sides can still avoid a worst-case scenario for the global economy, and US stocks climbed on Monday.

That hope is underpinning the Australian futures markets which at 5.50am AEST pointed to a rise of 1.37 per cent on opening. The market fell on Monday following a poor showing by tech stocks, and as investors reacted to news of the US-Iran negotiations’ failure.

In the US overnight, the S&P 500 rose 0.6 per cent in late trading after erasing an earlier dip. The Dow Jones Industrial Average was up 102 points, or 0.2 per cent, with an hour remaining in trading, and the Nasdaq composite was 0.8 per cent higher.

Even in the oil market, where prices briefly jumped over $100 per barrel after 21 hours of ceasefire talks failed over the weekend to end the conflict, prices pared their leaps as the day progressed. And the moves were much more modest than the extreme swings that have hit financial markets since the war began in late February.

After weekend talks failed, US President Donald Trump announced a blockade of the Strait of Hormuz, a manoeuvre that raises the pressure on Iran by trying to prevent it from making money by selling oil.

A blockade would keep even more oil off the global market, after prices already jumped for everyone worldwide because of Iran’s restrictions on traffic in the important strait. That narrow waterway is how much of the oil produced in the Persian Gulf area reaches customers worldwide.

Iran responded by threatening all ports in the Persian Gulf and the Gulf of Oman.

“Security in the Persian Gulf and the Sea of Oman is either for everyone or for NO ONE,” the Islamic Republic of Iran Broadcasting reported. “NO PORT in the region will be safe,” according to a statement from the Iranian military and the Revolutionary Guards.

The price of Brent crude, the international standard, rose to $US99.35 per barrel and is well above its roughly $US70 price from before the war. But it remains below the $US119 peak it has touched when worries about the US-Iran war have been at their heights. It also pulled back from its nearly $US104 price reached earlier on Monday morning.

“Markets are taking some encouragement from the fact that the two sides are talking and that the broader ceasefire seems to be holding, for now,” according to Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute.

And, as with so many pronouncements made so far in the US-Iran war, much will depend on the details of the blockade and exactly what gets restricted.

“Not all blockades are created the same,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management.

Trump said on Monday on his social media platform that “34 Ships went through the Strait of Hormuz yesterday, which is by far the highest number since this foolish [Iran] closure began.”

In the meantime, big US companies are beginning to tell investors how much money they made during the first three months of the year. Strong reports could help make up for worries about the Strait of Hormuz on Wall Street because stock prices tend to follow the trend of corporate profits over the long term.

Goldman Sachs, the investment bank, said it made $US5.63 billion in profit during the quarter, more than investors expected. But financial analysts pointed to some potentially concerning signals underneath the surface, including lower revenue from the trading of fixed income, commodities and currencies. Its stock fell 2.3 per cent.

Big banks traditionally lead earnings reporting season each quarter, and Citigroup, JPMorganChase, Wells Fargo, and Bank of America will all report later this week. So will Johnson & Johnson, Netflix and PepsiCo.

Helping to lead Wall Street was Sandisk, which jumped 8.7 per cent after learning it will replace Atlassian Corporation in the Nasdaq 100 index before trading begins on April 20. It will get included in such funds that track the index as Invesco’s QQQ, which controls nearly $US395 billion in investments.

Oracle’s gain of 11.2 per cent was the biggest in the S&P 500, which helped it recover some of its sharp loss for the year so far on worries that it may be spending too much to build up its artificial-intelligence capabilities.

Different kinds of worries about AI have been hammering software companies, raising the risk that their businesses may become obsolete. They also rallied to recover some of their big recent losses. ServiceNow climbed 6.7 per cent to trim its loss for the year so far to 42.2 per cent, and AppLovin climbed 6.1 per cent to get its loss for 2026 down to 38.4 per cent.

In the bond market, Treasury yields held relatively steady. The yield on the 10-year Treasury remained at 4.31 per cent, where it was late Friday.

Yields have largely been on the rise since the war began because of worries about high oil prices and inflation. That in turn has sent up rates for mortgages, which has hurt the housing market. A report on Monday said that sales of previously occupied homes were weaker in March than economists expected.

In stock markets abroad, indexes fell across much of Europe and Asia. Hong Kong’s Hang Seng fell 0.9 per cent, and South Korea’s Kospi dropped 0.9 per cent for two of the world’s larger losses.

“The outcome of the talks was not really what people were hoping for, that’s for certain,” Neil Newman managing director, head of strategy at Astris Advisory Japan, said in Hong Kong about the US-Iran negotiations.

“As we stand here at the moment, it doesn’t look very nice. Certainly, the oil prices are a big concern.”

With AP

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