Volkswacht Bodensee - Stocks rise, oil falls as traders eye earnings, US-Iran ceasefire

Oil prices pulled back, even as the United Arab Emirates said it came under a second day of Iranian missile and drone attacks.

Iran and US forces traded fire Monday as they vied for control of the Strait of Hormuz, a crucial export route for oil, gas and fertiliser whose blockage has disrupted the global economy.

However markets appeared reassured by comments from US Defense Secretary Pete Hegseth that the US was "not looking for a fight" in the strait, even as he vowed that Iranian attacks would "face overwhelming and devastating American firepower."

Wall Street's main stock indices advanced, with the tech-heavy Nasdaq setting a new all-time high, rebounding from Monday's losses over concerns about cracks in the ceasefire.

"The market psychology and the market momentum are so positive right now that as long as the news isn't truly terrible, the stock market seems inclined to rally," said Steve Sosnick of Interactive Brokers.

"US equities continue to get a boost from the first quarter earnings season," said Trade Nation analyst David Morrison.

He noted the year-on-year earnings growth rate over 27 percent, which if it holds up would make it the strongest quarter since the post-Covid rebound.

In Europe, Paris and Frankfurt ended the day with gains of more than one percent.

London's FTSE 100 index fell 1.4 percent as traders returned from the UK bank holiday.

The index was weighed by a sharp drop to the share price of banking giant HSBC, whose first-quarter earnings missed expectations as profits were hit by a surprise $400 million fraud-related charge and economic risks from the Middle East crisis.

Shares in Italian bank UniCredit jumped more than six percent in Milan after it reported a sharp rise in first-quarter net profit.

"First-quarter corporate earnings have largely been robust so far which has helped to sustain global equities despite the uncertain backdrop," said AJ Bell head of markets Dan Coatsworth.

"However, the longer the situation goes on without any sign of a lasting resolution, the harder it will be for investors to remain positive," he added.

- Oil price falls -

International oil benchmark Brent North Sea fell more than three percent to under $111 per barrel after sharp gains the previous day.

Crude prices surged Monday after the US military said it hit six Iranian boats threatening commercial shipping and its forces repelled missile and drones.

The United Arab Emirates, meanwhile, said it was targeted by Iranian strikes, including one on its vital Fujairah energy hub.

Fears that the ceasefire could fall apart weighed on Asian equities, with Hong Kong, Singapore, Mumbai, Bangkok, Manila and Wellington all down.

Sydney also retreated as the Australian central bank hiked interest rates for the third straight meeting, citing rising energy prices.

Tokyo and Shanghai were closed for holidays.

- Key figures at around 1530 GMT -

Brent North Sea Crude: DOWN 3.3 percent to $110.72 a barrel

West Texas Intermediate: DOWN 4.4 percent at $101.75 a barrel

New York - Dow: UP 0.6 percent at 49,224.29 points

New York - S&P 500: UP 0.8 percent 7,257.06

New York - Nasdaq Composite: UP 1.0 percent at 25,313.60

London - FTSE 100: DOWN 1.4 percent at 10,219.11 (close)

Paris - CAC 40: UP 1.1 percent at 8,062.31 (close)

Frankfurt - DAX: UP 1.7 percent at 24,401.70 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 25,898.61 (close)

Tokyo - Nikkei 225: Closed for a holiday

Shanghai - Composite: Closed for a holiday

Dollar/yen: UP at 157.69 yen from 157.08 yen on Monday

Euro/dollar: UP at $1.1706 from $1.1701

Pound/dollar: UP at $1.3565 from $1.3538

Euro/pound: DOWN at 86.31 pence from 86.41 pence

A.Ammann--VB