Oil prices rise, stocks mostly fall as US-Iran peace talks stall

Oil prices jumped on Friday as Iran vowed it would not reopen the Strait of Hormuz, through which one-fifth of global oil is shipped, as long as the United States blocks its ports.

The price of US crude oil WTI increased 1.23% to $97.03 per barrel early on Friday; Brent crude, the international standard, gained 1.26% to $106.4 per barrel.

The market reaction followed days of growing hopes and dashed expectations involving the strait.

Iran, which virtually controls the passage, said Friday that it would fully reopen the passage off its coast to commercial traffic, sending drude prices tumbling more than 10%, before it announced a reversal on Sunday.

On Thursday (April 23), global stocks mostly fell, retreating after recent gains as investors tempered their enthusiasm for a quick end to the Middle East war.

The price increase of the benchmark international oil contract, Brent North Sea crude, beyond the psychologically-significant $105/ barrel, rekindled fears of pervasive inflation that could dent economic growth around the globe.

Wall Street's main indexes finished lower after a volatile session, joining most markets in Europe and Asia in retreating. 

US investors were more preoccupied with high oil prices on Thursday than most recent days, said Art Hogan of B. Riley Wealth Management, noting that the market has been on an upswing since late March.

Tug-of-war between fundamentals, earnings

"There's still a tug of war between the fundamentals, the earnings that have been better than expected thus far and the fact that the news coming out of the Strait of Hormuz has not gotten more constructive," Hogan said.

Amid an extension to a fragile ceasefire, the United States and Iran seemed no closer to resuming lasting peace talks.

Solid first-quarter corporate earnings this week and resilient AI enthusiasm have supported stocks, but analysts say a prolonged Middle East war could quickly rattle confidence. 

Business activity in the eurozone contracted for the first time in 16 months in April, as the war in the Middle East drove energy prices up and disrupted global supply chains, according to the closely-watched Flash Eurozone purchasing managers' index (PMI) published by S&P Global.

"The eurozone is facing deepening economic woes from the war in the Middle East, presenting a major headache for policymakers," said S&P chief business economist Chris Williamson. 

"The conflict has pushed the economy into decline in April, while driving inflation sharply higher."

But the CAC 40 managed to push higher thanks largely to cosmetics heavyweight L'Oreal, whose stock surged after it reported a 3.6 percent rise in sales, boosted by growth in professional and dermatological products.

Meta plans to cut a tenth of its workforce, or about 8,000 employees and leave thousands of other positions unfilled next month, a source told AFP. Shares fell 2.3 percent.

The latest batch of US earnings drew a mixed response from markets. Tesla fell 3.6 percent and Lockheed Martin dropped 4.7 percent, while American Airlines jumped 2.4 percent.

In Asia, Seoul also bucked the downward trend to reach a record high on a fresh rally in the tech sector, which has been the backbone of a surge in the Kospi index this year.

Key figures at 2015 GMT

Brent North Sea Crude: UP 3.1 percent at $105.07 a barrel

West Texas Intermediate: UP 3.1 percent at $95.85 a barrel

New York - Dow Jones: DOWN 0.4 percent at 49,310.32 (close)

New York - S&P 500: DOWN 0.4 percent at 7,108.40 (close)

New York - Nasdaq: DOWN 0.9 percent at 24,438.50 (close)

London - FTSE 100: DOWN 0.2 percent at 10,457.01 (close)

Paris - CAC 40: UP 0.9 percent at 8,227.32 (close)

Frankfurt - DAX: DOWN 0.2 percent at 24,155.45 (close)

Tokyo - Nikkei 225: DOWN 0.8 percent at 59,140.23 (close)

Hong Kong - Hang Seng Index: DOWN 1.0 percent at 25,915.20

Shanghai - Composite: DOWN 0.3 percent at 4,093.25 (close)

Euro/dollar: DOWN at $1.1684 from $1.1705

Pound/dollar: DOWN at $1.3465 from $1.3502

Dollar/yen: UP at 159.72 yen from 159.48 yen

Euro/pound: UP at 86.76 pence from 86.69 pence