North America’s main indexes opened slightly lower on Monday as peace talks between the U.S. and Iran stalled, while investors awaited a flood of earnings as well as commentary from the Federal Reserve meeting this week.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 0.3 per cent at 33,792.96 points.
In New York, the Dow Jones Industrial Average fell 118.5 points, or 0.24 per cent, to 49,112.2. The S&P 500 fell 12.4 points, or 0.17 per cent, to 7,152.72, while the Nasdaq Composite dropped 37.0 points, or 0.15 per cent, to 24,799.637.
U.S. President Donald Trump canceled a visit by two U.S. envoys to Pakistan, dealing a new blow to peace prospects. With an agreement to end the war still out of reach, investors have drawn reassurance from solid earnings so far.
Of the 139 companies in the S&P 500 that reported results as of Friday, 81.3 per cent surpassed earnings expectations, compared with the prior four-quarter average of 78.1 per cent, according to data from LSEG.
However, some analysts have questioned how dependable the results are as a guide to future performance, since they reflect only one month of disruption linked to the Middle East war.
“While earnings are now demanding a lot of focus from investors, certainly the constant drumbeat in the background is the Iranian conflict,” said Peter Andersen, founder at Andersen Capital Management.
“There doesn’t seem to be any progress on a resolution. Once the earnings period is over, investors probably will start to refocus on the Iranian conflict and what it means in the long-term impact for the equity markets.”
The trajectory of oil prices remains the biggest unknown, as the crucial Strait of Hormuz is still closed. Brent crude futures were trading about 1 per cent higher on Monday and are 46.7 per cent above pre-war levels.
Investors will also hear from Federal Reserve policymakers, who will gather in Washington this week in what may be Jerome Powell’s last meeting as head of the U.S. central bank.
Republican Senator Thom Tillis said on Sunday he would allow the Senate confirmation of Fed chair nominee Kevin Warsh to go forward, after the Department of Justice dropped an investigation into Powell that Tillis said was a threat to the central bank’s independence.
“With those obstacles now removed, the path appears clearer for Warsh’s confirmation ahead of the next policy meeting (in June),” said Jefferies’ chief U.S. economist Thomas Simons.
A Reuters poll of economists last week showed that the Fed is expected to wait at least six months before cutting interest rates this year.
In early trading, Qualcomm was up 6.8 per cent after an analyst said OpenAI was working with the chip designer and Taiwan’s MediaTek to develop smartphone processors.
Domino’s Pizza slipped 7.4 per cent after the pizza chain missed first-quarter sales estimates.
Nvidia rose nearly 1 per cent after jumping 4.3 per cent in the previous session. The company has reclaimed a market valuation above US$5-trillion.
In midday European trading, Germany’s DAX picked up 0.9 per cent, while the CAC 40 in Paris rose 0.7 per cent. Britain’s FTSE 100 gained 0.3 per cent.
In Asian trading, Tokyo’s Nikkei 225 surged 1.4 per cent to 60,537.36 after touching a new intraday high of 60,903.95. The Kospi in South Korea jumped 2 per cent to 6,615.03.
Hong Kong’s Hang Seng index shed 0.1 per cent to 25,964.27 and the Shanghai Composite index gained 0.2 per cent to 4,086.34.
Australia’s S&P/ASX 200 slipped 0.2 per cent to 8,766.40.
Taiwan’s Taiex rallied 1.8 per cent, helped by a revival of buying of tech shares driven by the boom in artificial intelligence. India’s Sensex added 0.8 per cent.
Reuters and The Associated Press