Crude oil fell for the first time in six days after President Donald Trump signaled he may hold off on attacking Iran for now. Precious metals also slipped from their record highs.
Brent dropped as much as 3.1% Thursday as Trump said he was reassured by sources “on the other side” that the government in Tehran would stop killing people involved in widespread protests. Even so, Iran temporarily closed airspace around its capital amid tensions with the US.
Silver tumbled as much as 7.3% as Trump held off on imposing new tariffs on imports of critical minerals. Gold, platinum and palladium all declined as well. Asian shares fell 0.2%, retreating from a record high. US equity-index futures also dropped after the underlying gauges fell as investors rotated out of technology stocks Wednesday.
With key economic data from the US not moving expectations for a Federal Reserve interest-rate cut until the middle of the year, traders are turning their attention to how the rotation out of richly valued tech stocks pans out. Asian shares have outpaced gains on Wall Street this year on relatively cheaper valuations and optimism over the artificial-intelligence trade.
“This is a demonstration of what occurs when rotation affects the stocks that dominate key indexes,” Steve Sosnick, chief strategist at Interactive Brokers, wrote in a note.
Thursday's moves in precious metals came after the commodities extended their stellar run in 2025.
A broad metals rally sent silver and gold to fresh peaks on Wednesday, along with copper and tin, as investors turned to hard assets due to an array of geopolitical, economic and supply risks. Frenzied buying in China and the US, and a broader rotation into commodities have are bolstering demand.
Concerns about US tariffs on silver, along with platinum and palladium, were temporarily eased as Trump said he would negotiate bilateral agreements to ensure adequate supplies of critical minerals. He floated price floors on imports — not just percentage-based tariffs — to develop supply chains, but didn't rule out levies in future, according to a statement late on Wednesday.
“The overall market sentiment worsened,” said Li Xuezhi, head of research at Chaos Ternary Futures Co., adding the postponing tariffs on critical minerals, “eased concerns about distortions in logistics.”
What Bloomberg strategists say...
The swings in commodities highlight the extreme volatility being fed by President Trump's mercurial policy style, though so far the declines for raw materials are still too small to seriously dent this year's substantial rallies. There's plenty of potential that investors will be itching to pile back in to commodities assets given how often they've bounced back to fresh highs following occasional corrections in recent weeks.
Elsewhere in Asia, the South Korean won edged lower after jumping Wednesday when US Treasury Secretary Scott Bessent referred to excessive declines in the currency. His comments represented rare verbal support for the won as it slides toward its weakest since 2009.
The won weakened 0.2% against the dollar as the Bank of Korea left its benchmark rate unchanged in a widely predicted policy decision.
“Bessent's comments can support the won in the near term, but markets may have more influence if they feel the fundamentals and politics are still in a worsening trajectory,” said Brendan McKenna, a strategist at Wells Fargo in New York.
Attention was also on Japan, where Prime Minister Sanae Takaichi was expected to call a snap election early in the parliamentary session starting later this month. Equities in the country had rallied and the yen had come under pressure amid reports of a snap poll.
The yen fluctuated after Bessent spoke with Japanese Finance Minister Satsuki Katayama and noted the “inherent undesirability of excess exchange rate volatility.”
Back to stocks, while the S&P 500 fell Wednesday amid a slide in all “Magnificent Seven” shares, more than 300 of its firms actually rose. Small caps continued to outperform, with the Russell 2000 beating the S&P 500 for a ninth straight session — matching the longest streak since 1990.
On the macro front, US retail sales rose in November by the most since July, fueled by a rebound in auto purchases and resilient holiday shopping. Wholesale inflation picked up slightly on a jump in energy costs, even as prices for services were unchanged.
Elsewhere, Trump told Reuters he does not plan to fire Fed Chair Jerome Powell despite a Justice Department probe into the central bank's renovation.
Corporate Highlights:
- The Toyota group sweetened a bid to privatize a key unit on the eve of its tender period, but that's unlikely to placate investors who say the new price still undervalues the company.
- OpenAI signed a multiyear deal to use hardware from Cerebras Systems Inc. for 750 megawatts' worth of computing power, an alliance that will support the company's rapid build-out of AI infrastructure.
- Alphabet Inc.'s Google said its Gemini artificial intelligence assistant can now proactively tap into users' data across Gmail, Search, Photos and YouTube, an attempt to make its consumer-facing AI product more personalized.
- Infosys Ltd. raised its annual sales forecast, signaling that a protracted slump in corporate information technology spending is starting to ease helped by adoption of newer technologies such as artificial intelligence and cloud services.
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 12:11 p.m. Tokyo time
- Japan's Topix rose 0.4%
- Australia's S&P/ASX 200 rose 0.3%
- Hong Kong's Hang Seng was little changed
- The Shanghai Composite fell 0.3%
- Euro Stoxx 50 futures rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1639
- The Japanese yen was little changed at 158.57 per dollar
- The offshore yuan was little changed at 6.9679 per dollar
Cryptocurrencies
- Bitcoin fell 1.3% to $96,283.43
- Ether fell 1.7% to $3,314.43
Bonds
- The yield on 10-year Treasuries advanced one basis point to 4.14%
- Japan's 10-year yield declined 2.5 basis points to 2.155%
- Australia's 10-year yield declined five basis points to 4.67%
Commodities
- West Texas Intermediate crude fell 2.9% to $60.23 a barrel
- Spot gold fell 0.6% to $4,598.45 an ounce
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