Stock markets rose on Friday after US President Donald Trump stated that there would be no strike on Iran prior to the midterm elections. He also announced that Russian diesel would be released to global markets as a result of discussions with Russian President Vladimir Putin. Trump mentioned that Washington was engaging in "productive discussions" with Tehran, amidst reports that the White House had instructed the Pentagon to prepare plans for a potential attack ahead of the November 3 elections.
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In addition to the announcements, Trump confirmed Putin's consent to allow a significant release of diesel to American and international markets, which would temporarily ease sanctions. Angelo Kourkafas of Edward Jones remarked that this deal has helped alleviate some worst-case scenarios concerning supply and inflation.
Global oil prices have surged due to ongoing conflict in the Middle East, particularly with Iran's blockade of the Strait of Hormuz following US-Israel strikes beginning in late February. Nevertheless, Chris Beauchamp, chief market analyst at IG, pointed out that while Trump's comments on Tehran are positive, they do not resolve the underlying tensions in the region. He noted that sustained declines in oil prices are less likely if tanker and insurance rates remain elevated, even with improved supply flows.
Tech stocks showed a recovery from a dip on Thursday, triggered by a Financial Times report indicating that OpenAI, creator of ChatGPT, anticipated $50 billion in annualized revenue this year, below an earlier estimate of $70 billion. This news initially caused Wall Street's Nasdaq Composite to decline by more than one percent, with Nvidia falling nearly three percent and other tech giants like Microsoft, AMD, and Amazon also experiencing losses. However, Bloomberg later reported that OpenAI was still on track to meet the original revenue estimate.
By the end of Friday, US stocks had rallied, closing positively, following a mostly higher day in Asia and significant gains in European markets. Microsoft shares rose by 2.4 percent, and Amazon saw a 3.3 percent increase. Josh Gilbert at eToro noted that the upcoming earnings season would be a critical time for understanding whether leading companies in artificial intelligence are willing to maintain their investment levels.
In related news, China and the European Union have reached an agreement to manage exports of hybrid vehicles, which could limit the shipment of millions of Chinese cars to Europe, according to the EU's commerce chief. This development follows discussions aimed at preventing an anticipated trade war.