Pullback By Crude Oil Prices May Lead To Strength On Wall Street
(RTTNews) - After recovering from early weakness to end the previous session roughly flat, stocks are likely to move to the upside in early trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.3 percent.
Early buying interest is likely to be generated in reaction to a significant pullback by the price of crude oil, which had surged over the two previous sessions.
U.S. crude oil futures are tumbling by more than 2 percent on the day after spiking by 4.5 percent over the past two days.
The sharp pullback by crude oil prices comes as traders react to the latest reports about a potential deal to end the prolonged conflict between the U.S. and Iran.
New reports indicate that Iran has submitted a proposal to the U.S. to end the war and reopen the Strait of Hormuz within seven days.
The proposal was delivered to U.S. officials when the two sides met through mediators this week, the Washington Post quoted Iranian Foreign Minister Abbas Araghchi as saying on the sidelines of the UN General Assembly.
Buying interest may be somewhat subdued, however, with a continued increase in treasury yields likely to make some traders wary of making more significant moves.
Extending the surge seen over the two previous sessions, the yield has risen by 2 basis points, once again reaching its highest levels since July 2007.
After showing a significant move to the downside early in the session, stocks showed a notable recovery attempt over the course of the trading day on Thursday. The major averages climbed well off their lows of the session, with the Nasdaq and S&P 500 closing roughly flat.
The tech-heavy Nasdaq inched up 3.34 points or less than a tenth of a percent to 26,939.37, while the S&P 500 edged down 1.90 points or less than a tenth of a percent to 7,704.13.
The narrower Dow climbed well off its worst levels but still closed down 161.61 points or 0.3 percent at 51,349.98.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Friday, with several major markets closed for holidays. Japan's Nikkei 225 Index jumped by 1.3 percent, while Hong Kong's Hang Seng Index slumped by 1 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index is up by 0.7 percent, the U.K.'s FTSE 100 Index is up by 0.3 percent and the French CAC 40 Index is up by 0.2 percent.
In commodities trading, crude oil futures are plunging $1.97 to $92.64 a barrel after surging $2.45 to $94.61 a barrel on Thursday. Meanwhile, after falling $20.40 to $4,298 an ounce in the previous session, gold futures are climbing $36.90 to $4,334.90 an ounce.
On the currency front, the U.S. dollar is trading at 157.68 yen versus the 158.83 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1398 compared to yesterday's $1.1379.
