Crude and gold prices retreat on Iran talks while tech stock prices surge

This week

This week, investors will focus on Micron’s earnings on Wednesday and Tesla’s planned Roadster unveiling on Thursday, October 1. Friday’s US employment report will be closely watched after the recent rise in Fed rate-hike expectations. Traders will also look ahead to a new earnings season, while the direction of the Iran talks and oil prices will remain important factors for the inflation and interest rate outlook. On Sunday, OPEC+ V7 will meet to set production targets for next month.

 

Stocks

Meta

Meta’s price surged 13.0% last week, reaching a one-year high as investors responded positively to its AI plans. Its stock price jumped on Monday after its new Muse AI assistant became the most downloaded free app on Apple’s US App Store, adding to market optimism around Meta’s AI strategy. The rally continued after Meta unveiled new products at its Connect event, including updated smart glasses with displays, new Ray-Ban Meta glasses and a small device built around Muse. Meta is expected to report third-quarter results in late October.

Moderna

Moderna’s price jumped 29.2% last week and hit a more-than-three-year high after investors reacted to developments surrounding its personalised cancer vaccine. Early in the week, Moderna said data from its Phase 3 melanoma trial would be presented at a Presidential Symposium cancer conference in October. The vaccine has been reported to reduce the risk of melanoma returning, with the results drawing attention to the company’s use of mRNA technology in cancer and other areas. Moderna is seeking to expand beyond its Covid vaccine business, and its next earnings report is expected in early November.

 

Commodities

Crude Oil

Crude oil price fell 3.1% last week and touched a three-week low as reports of US-Iran diplomacy reduced fears of a prolonged disruption to Gulf supply. Reports suggested that negotiators were exploring a phased route out of the conflict in which Iran could reopen the Strait of Hormuz, and Washington could lift its economic blockade. The extension of the US-China trade truce also reduced concerns that energy demand could be weakened.

Gold

Gold price fell 2.1% last week and pulled back to a one-week low as rising Treasury yields and stronger expectations of a further Fed rate hike weighed on non-yielding instruments. The prospect of a phased Iran agreement also reduced demand for the metal, even though the talks remained fragile and Houthi attacks on Saudi Arabia continued to threaten regional energy infrastructure. Gold pared losses on Friday but still recorded a weekly decline.

Natural Gas

Natural gas jumped 12.2% last week and hit a six-month peak after a problem with the Mountaineer XPress pipeline restricted supplies to the US Northeast. The disruption added to concerns about supplies at a time when strong LNG exports were already supporting demand. Warmer-than-usual weather forecasts for early October also pointed to stronger demand, although prices fell on Friday after forecasts turned milder. The pipeline disruption was the main reason for the sharp weekly rise, with weather and strong LNG demand adding to gains.

 

GBP/USD

GBP/USD fell 1.1% last week and dropped to an almost three-month low as the dollar benefited from growing expectations of another Federal Reserve rate hike. Several Fed officials continued to warn that inflation remains too high, while markets increasingly looked towards another increase in October. Sterling also came under pressure from weaker UK business data. Higher energy costs due to the Middle East conflict are keeping pressure on UK inflation and raising expectations of Bank of England rate increases later this year, but the prospect of higher borrowing costs is a concern for the UK economy.

 

Recap

Last week the S&P 500 rose 1.2%, the Nasdaq climbed 2.1%, and the Dow Jones increased 0.3%, with the Nasdaq reaching a record high as technology shares led the strongest weekly advance in three weeks. Crude oil and gold fell, while silver, platinum and palladium also declined as the US dollar advanced. Oil retreated after US and Iranian negotiators were reported to be considering a phased agreement involving the partial reopening of the Strait of Hormuz in return for a lifting of the US blockade. The US-China summit was held in Washington midweek, where the countries agreed to extend their trade truce and maintain lower reciprocal tariffs, easing trade tensions.