By Gregor Stuart Hunter SINGAPORE, April 6 (Reuters) - Oil prices rose, bonds fell and stocks were mixed at the start of trading in Asia on Monday as U.S. President Donald Trump vowed "hell" if Tehran
Equities gain, oil settles higher as investors watch US-Iran standoff
By Sinéad Carew and Gregor Stuart Hunter
Market Reactions Amid US-Iran Tensions
NEW YORK/SINGAPORE, April 6 (Reuters) - U.S. equity indexes closed modestly higher and U.S. oil futures settled above $112 per barrel on Monday as investors waited for clarity on the prospects of a resolution to the war in the Middle East.
The U.S. and Iran exchanged verbal attacks while President Donald Trump reiterated threats to strike Iran unless Tehran makes a deal by Tuesday night.
Iran said on Monday it wanted a lasting end to the war with the U.S. and Israel, and pushed back against pressure to reopen the Strait of Hormuz. Trump warned the country could be "taken out" if it did not meet his Tuesday night deadline.
Escalating Rhetoric and Geopolitical Risks
Trump said at a press conference that the U.S. had an active and willing participant on the other side in talks with Iran. But he repeated threats to attack Iranian power plants and other key infrastructure, and U.S. Defense Secretary Pete Hegseth said the largest volume of strikes since day one of the war would occur on Monday and warned of more on Tuesday. Meanwhile Iran's top joint military command described Trump's threats as "delusional."
This followed the U.S. president's expletive-laden Easter Sunday social media post, which threatened to target Iranian infrastructure unless it reopens the strait, through which a fifth of global energy traffic passes.
Oil and Equities Performance
Crude Rises in Choppy Session
Oil lost ground earlier in a choppy session as the U.S. and Iran weighed their next steps, but futures ultimately finished higher. U.S. crude settled up 0.78%, or 87 cents, at $112.41 a barrel while Brent settled at $109.77 per barrel, up 0.68%, or 74 cents.
Wall Street Indices and Global Stocks
On Wall Street, the S&P 500 and the Nasdaq registered their fourth advance in a row for the first time since late January, although gains were relatively small and trading volume was light after the long weekend.
The Dow Jones Industrial Average rose 165.21 points, or 0.36%, to 46,669.88, the S&P 500 rose 29.14 points, or 0.44%, to 6,611.83 and the Nasdaq Composite rose 117.16 points, or 0.54%, to 21,996.34.
Analyst Commentary
"The stock market has been stuck in neutral for most of the day. All the focus is on geopolitics, as traders are waiting to see if President Trump follows through on his threat to resume bombing Iranian energy infrastructure on Tuesday night," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
With some financial markets closed for the Easter Monday and Tomb-Sweeping Day holidays, MSCI's gauge of stocks across the globe rose 3.47 points, or 0.35%, to 997.67.
Currency and Treasury Markets
Treasury Yields Hold Steady
In currencies, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.21% to 99.99. But, with many Asian and European markets closed on Monday, liquidity was thin.
The euro was up 0.24% at $1.1543 while against the Japanese yen, the dollar strengthened 0.08% to 159.69.
On Friday, Japanese Finance Minister Satsuki Katayama put currency traders on notice, saying the government stands ready to act against speculative moves in foreign exchange markets as volatility has risen "significantly."
Yields on U.S. Treasuries were little changed with investors caught between optimism over reports of a ceasefire plan and unease over Trump's threat to escalate strikes on Iran.
Market Sentiment
"Markets are starting to digest that they can't take any single headline at face value. And part of that is that President Trump and Iran have been shifting their sentiment about how likely ceasefire negotiations are going to be," said Will Compernolle, macro strategist at FHN Financial in Chicago.
The yield on benchmark U.S. 10-year notes fell 0.5 basis points to 4.341% from 4.346%, while the 30-year bond yield fell 1.1 basis points to 4.8948%.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, was flat at 3.852%.
Economic Data and Precious Metals
Earlier in the day, data from the Institute for Supply Management showed that U.S. services sector growth slowed in March, while prices paid by businesses for inputs climbed to near a 3-1/2-year high, an early sign that the prolonged war with Iran was boosting inflation pressures.
In precious metals, gold prices edged lower as investors awaited further signals on the U.S.-Iran situation ahead of the Tuesday deadline.
Spot gold fell 0.42% to $4,656.21 an ounce while spot silver rose 0.01% to $73.00 an ounce.
(Reporting by Sinéad Carew, Gertrude Chavez-Dreyfuss, Gregor Stuart Hunter; Editing by Lincoln Feast, Shri Navaratnam, Keith Weir, Rod Nickel and)
