Key facts
- Major stock indexes, including the Nasdaq and chipmaker shares, saw gains on Tuesday.
- Oil prices reached a five-week high due to rising tensions in the Iran conflict, with U.S. crude at $85.16 and Brent at $91.08.
- Benchmark 10-year U.S. Treasury yields hit a two-month high of 4.640%.
- Traders are considering the impact of oil price spikes on consumer prices and the likelihood of further Federal Reserve rate hikes.
- The U.S. imposed a 50% tariff on various Canadian products, leading to a weakening of the Canadian dollar.
Major stock indexes experienced gains on Tuesday, with particular strength seen in the Nasdaq and semiconductor shares. This rise coincided with oil prices reaching a five-week high, driven by escalating tensions involving Iran and threats from Yemen's Houthi rebels in the Red Sea. U.S. crude oil futures increased by 2.32% to $85.16 a barrel, while Brent crude rose 2.08% to $91.08 per barrel.
Benchmark 10-year U.S. Treasury yields climbed to a two-month high of 4.640%, as investors weighed the potential inflationary impact of higher oil prices and the possibility of further interest rate hikes by the Federal Reserve. Money markets are now pricing in at least one rate increase from the Fed this year.
In trade news, the U.S. imposed a new 50% tariff on a range of Canadian products, causing the Canadian dollar to weaken by 0.15% against the U.S. dollar. Meanwhile, U.S. and Mexican trade negotiators are set to meet for further talks on revising the North American trade agreement.
The dollar index, measuring the greenback against a basket of major currencies, rose 0.17% to 101.12, while the euro saw a slight decline of 0.05% to $1.1408.
Market participants are also anticipating corporate earnings reports this week, with key results expected from companies like Intel and Alphabet. The performance of the AI trade is a particular focus, given high profit expectations.