U.S. futures are climbing and as oil prices retreated from their recent gains after U.S. President Donald Trump said “productive discussions” are happening with Iran.
Futures for the S&P 500 gained 0.4 per cent on Friday, while the Dow Jones Industrial Average edged up 0.1 per cent. Nasdaq futures rose 0.7 per cent.
Trump said in a social media post on Thursday that his team has been “having productive discussions with the Islamic Republic of Iran.” He also indicated that he will not order a resumption of military strikes on Iran before the Nov. 3 midterm elections in the United States.
Brent crude oil declined 1.2 per cent on Friday to US$103.01 a barrel, while U.S. benchmark crude oil fell 0.9 per cent to $90.69 a barrel.
The drop in oil prices comes after stocks felt pressure on Thursday from a 4.1 per cent rise in the price for a barrel of Brent, the international standard, to more than $104. It’s been pinballing between $96 and nearly $110 over the last month on uncertainty about when the war with Iran will allow the global energy industry to return to normal.
In the bond market, yields have been trading at their highest levels in years or even decades, threatening to slow the economy.
The 10-year Treasury yield initially rose to 5.35 per cent on Thursday before falling back to 5.23 per cent. It edged up slightly to 5.25 per cent on Friday.
The yield’s fluctuations came after the U.S. government said that it sold $22 billion in 30-year Treasury bonds at an auction with a high yield of less than 5.62 per cent. That helped bring the 30-year Treasury yield down to 5.60 per cent from 5.73 per cent on Thursday, which is a notable move for the bond market. It was at 5.62 per cent on Friday.
High debt loads have loomed over the market as the U.S. federal deficit climbed to nearly $2 trillion in the fiscal year that ended on Sept. 30.
Investors are also continuing to keep an eye on the latest earnings reports. On Friday shares of Delta Air Lines dropped more than four per cent before the market open after the airline reported a quarterly profit that missed estimates. Delta also trimmed its full-year estimate for earnings per share, citing a $6 billion increase in fuel costs.
Several of the country’s biggest banks release quarterly results next week.
Analysts expect companies in the S&P 500 to deliver overall growth of nearly 30 per cent in earnings per share from a year earlier, according to data provider FactSet. If they’re correct, it would be the third consecutive quarter of growth that exceeds 25 per cent.
In Europe, the German DAX climbed one per cent to 25,044.82, while the CAC 40 in Paris gained 0.6 per cent to 7,775.44. Britain’s FTSE 100 rose 0.9 per cent to 10,538.88. Asian markets were mixed. Markets were closed in South Korea and Taiwan.
China is due to release its latest economic growth figures next week.
In other dealings, the U.S. dollar rose to 158.29 Japanese yen from 157.89 yen. The euro was trading at $1.1210, edging lower from $1.1211.
By Elaine Kurtenbach and Michelle Chapman
