US Stocks Decline Amid Ongoing US-Iran Peace Negotiations

Global Markets Experience Mixed Day as Iran and US Negotiate Ceasefire Agreement

On Thursday, global stock markets saw a mixed day of trading as the United States and Iran edged closer to a limited and temporary agreement to halt their war. The Strait of Hormuz, a crucial waterway through which about a fifth of the world's oil and liquefied natural gas passes, remained a point of contention.

In the United States, major stock indexes saw a slight pullback from the previous session's multiple records. The S&P 500 fell 0.4%, the Nasdaq Composite dipped 0.1%, and the Dow Jones Industrial Average lost 0.5%. However, the positive sentiment in the market was reflected in Europe's STOXX 600, which finished 1.1% lower, having jumped 2.2% on Wednesday.

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Meanwhile, MSCI's All-Country World Index ticked down 0.1%, holding around record highs. The Lombard Odier chief economist, Samy Chaar, noted that the momentum in the market was going in a positive direction, with oil prices down from their highs and bond yields relieved of pressure.

Oil prices were volatile, but ultimately little changed, with Brent crude falling about 0.7% to $100.56 a barrel. Despite this, Brent remains around 40% above its late-February level, when the war began. The 10-year U.S. Treasury yields rose by 3.4 basis points to 4.388%, a reminder of the strain higher energy costs continue to put on the global economy.

Investec market strategists warned that the clock was ticking towards a point when oil inventory drawdowns at the current pace would become unsustainable and energy prices would jump materially. However, a fragile ceasefire and prospect of a deal have spurred a risk-on rally since April, fueled by strong tech earnings reports.

S&P 500 companies are on track for their strongest profit growth in more than four years, while blowout results from Samsung, SK Hynix, and TSMC have reinforced the upbeat tone in Asia. Market strategists expect U.S. earnings to confirm a broad-based profit boom, with record EPS beats, all-time-high margins, and sharply upgraded '26 growth expectations.

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Investors await the U.S. non-farm payrolls report on Friday, with jobs expected to have increased in April by 62,000 after rebounding 178,000 in March. In currency markets, the euro nudged up and last fetched $1.175, while the dollar index was flat. The yen remained in the spotlight after spikes in recent sessions prompted market speculation that Japan had intervened to support the long-battered currency.