Volkswacht Bodensee - Renewed hopes of Iran peace talks keep oil under $100 per barrel

Equities traded mixed, however, although the tech-heavy Nasdaq Composite set a fresh record high in New York thanks to a surge in stocks of chip manufacturing firms like Intel, which saw its shares rocket 25 percent higher after it smashed quarterly earnings expectations.

Oil prices had been climbing earlier in the day as investors worried about a lack of progress in ending the Middle East crisis, with Tehran keeping the Strait of Hormuz closed and the US maintaining a blockade of Iranian ports.

But they dropped on reports Iran's Foreign Minister Abbas Araghchi was to arrive in Islamabad on Friday night.

Brent crude, the international benchmark contract, fell back below $100 a barrel.

"Investors are anchoring themselves to this good news and seem to be happy to buy risky assets, as it suggests a de-escalation of the situation ahead of the weekend," said Kathleen Brooks, head of research at trading platform XTB.

The Pakistan capital has been gearing up for an anticipated second round of talks between the United States and Iran, but it was not clear whether Araghchi and the delegation accompanying him would meet any US officials.

Sentiment was also boosted by Israel and Lebanon agreeing to extend their ceasefire for three weeks.

Global stock markets have recently managed to recover the heavy losses they suffered at the start of the war, with first-quarter earnings in many cases beating estimates and helping the S&P 500 and Nasdaq set fresh records.

Chipmakers in particular continue to outperform thanks to continued optimism about growth in the artificial intelligence sector.

"There has been a record 17-day rally in semiconductor stocks, which is a record," said Brooks.

The jump in Intel shares came after the chipmaker, which was late to the AI game, forecast rising revenue on continued strong demand for its chips used in data centres.

Shares in Meta and Microsoft rose after the companies announced layoffs as they pour massive sums into AI.

Meta plans to cut a tenth of its workforce, or 8,000 people, and Microsoft will offer buyouts to 8,750 employees in the United States, or seven percent of its US workforce.

"It is worth noting that these job cuts have more to do with overhiring during Covid rather than an AI revolution," Brooks said.

"The cost reductions from these job cuts is a drop in the ocean compared to what Meta and Microsoft are spending in AI investment, and the market may not be too impressed with this news for long," she added.

Investors were also looking to position themselves ahead of next week's slew of earnings from US tech titans Alphabet, Meta, Microsoft, Amazon and Apple.

Wall Street's main indices were mostly higher in late morning trading.

European stocks ended lower, with Frankfurt weighed down by data showing that German business morale had fallen to the lowest level since the Covid pandemic.

"The German economy is being hit hard by the Iran crisis," said Ifo president Clemens Fuest. "Companies are considerably more pessimistic about the coming months."

- Key figures at 1530 GMT -

Brent North Sea Crude: UP 0.3 percent at $99.67 a barrel

West Texas Intermediate: DOWN 0.5 percent at $95.34 a barrel

New York - Dow Jones: DOWN 0.4 percent at 49,3128.16 points

New York - S&P 500: UP 0.5 percent at 7,144.40

New York - Nasdaq Composite UP 1.2 percent at 24,736.09

London - FTSE 100: DOWN 0.8 percent at 10,379.08 (close)

Paris - CAC 40: DOWN 0.8 percent at 8,175.82 (close)

Frankfurt - DAX: DOWN 0.1 percent at 24,128.98 (close)

Tokyo - Nikkei 225: UP 1.0 percent at 59,716.18 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 25,978.07 (close)

Shanghai - Composite: DOWN 0.3 percent at 4,079.90 (close)

Euro/dollar: UP at $1.1707 from $1.1684 on Thursday

Pound/dollar: UP at $1.3501 from $1.3465

Dollar/yen: DOWN at 159.51 yen from 159.72 yen

Euro/pound: DOWN at 86.73 pence from 86.76 pence

burs-rl/giv

B.Wyler--VB