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Fuel costs are increasing, so airlines are reducing their prices and cutting back on their outlook.
The U.S. and Israeli war against Iran, which has pushed up jet fuel prices, has shook the aviation industry around the world. Airlines have been forced to increase fares and revise financial forecasts. In recent weeks, jet fuel prices have increased from $85-$90 per barrel up to $150-$200 per barrel. This is a major financial blow to an industry that relies on fuel for up to 25% of its operating costs. Here is an alphabetical list of the ways that?airlines have responded: AEGEAN AIRLINES The Greek airline anticipates that the suspension of Middle East flights, as well as a spike in fuel costs, will have "a significant impact" on their first-quarter earnings. AIRASIA X Malaysian Airlines executives announced that the company has cut 10% of its flights in the group and imposed a fuel surcharge of around 20%. AIR CANADA The Canadian largest airline plans to reduce four of its daily flights to New York to 38 due to rising fuel prices. From June 1, 2026, the four flights to JFK International Airport are being cut. AIR FRANCE-KLM The airline group said that it would increase the price of long-haul tickets to offset rising fuel costs. Cabin fares will rise by 58 euros (50 euros) per round-trip. KLM, the Dutch subsidiary of the group, announced on April 16 that it would cancel 160 flights across Europe in a month due to rising fuel costs. AIR INDIA The Indian airline said that it will change its fuel surcharge system from a flat surcharge for domestic flights to one based on distance. The Indian carrier said that surcharges for international routes do not compensate the steep rise in fuel costs. AIRLINE OPERATORS IN NIGERIA In a letter to the Nigerian fuel industry association, it was claimed that they were artificially increasing prices. AIR NEW ZEALAND On April 7, the airline announced that it would cut flights in May and June, and raise fares. It was one of the earliest to announce a large increase in ticket prices after the conflict erupted. The airline also suspended its earnings forecast for the full year due to volatility in the fuel markets. AKASA AIR Akasa Airlines, based in India, announced that it would be introducing fuel surcharges ranging from 199 to 1,300 Indian Rupees ($2 - $14) for domestic and international flights. ALASKA AIR The U.S. carrier said that it would raise fees by $5 for the first bag and $10 for the second for flights in North America, as well for Hawaiian Airlines. The third checked bag was raised from $50 to 200 dollars. AMERICAN AIRLINES The U.S. carrier announced that it would increase the fees for checked baggage by $10 for each of the first two bags, and $150 for the third bag, on both domestic and short-haul flights. The airline also reduced certain benefits for passengers in economy class. The company had previously said that it anticipated a $400-million increase in expenses for the first quarter due to rising fuel prices. ASIANA AIRLINES Newsis reported that the South Korean airline would cut 22 flights from April to July because of fuel price increases. CATHAY PACIFIC Hong Kong Airlines announced that it would cancel about 2% scheduled passenger flights between mid-May and the end of June. Meanwhile, HK Express, its budget airline, was cutting approximately 6% flights. The carrier had previously stated that it would increase its fuel surcharge across all routes by 34% from April 1, and will review the charges every two weeks. CEBU AIR The Philippines-based carrier said that the sharp increase in fuel prices is a major concern. It will continue to review pricing and network strategies and try to minimize the impact. CHINA EASTERN EXPRESS AIRLINES Air China said that it would increase fuel surcharges on domestic flights starting April 5. Flights of less than 800km will be charged a surcharge of 60 yuan, and flights above 800km will be charged a surcharge 120 yuan. DELTA AIR LINES Delta announced that it would reduce capacity by approximately 3.5 percentage points compared to its original plan, and increase fees for checked baggage in order to offset the rising costs of jet fuel. The increase will be $10 for first and second bags, and $50 on third bags. The U.S. carrier pulled all planned growth in capacity for the current quarter, and predicted profit that was below Wall Street expectations. Delta's CEO said that the company would not update its full-year forecast due to the uncertainty surrounding the fuel price hike. EASYJET EasyJet has warned that it will suffer a larger half-year loss before tax of between 540 and 560 millions pounds ($731 and $758) in March, including an extra 25 million pounds of fuel costs. Kenton Jarvis, CEO of British Airways, said that European consumers can expect to pay higher prices at the end summer when fuel hedges expire. FRONTIER AÉRIENS Fuel prices have risen'significantly' since the airline issued its outlook. GREATER BAY Airlines The Hong Kong-based firm said that it will increase fuel surcharges for most routes on April 1, but keep them the same on routes to mainland China and Japan. The carrier has announced that the surcharge on flights between Hong Kong, Philippines and other destinations will be more than doubled. HONG KONG Airlines The airline announced that it would increase fuel surcharges up to 35% starting March 12. The biggest increases would be on flights between Hong Kong, Bangladesh, and Nepal where the charges would go from HK$284 to HK$384 (US$49). British Airways' owner IAG stated in March that it does not intend to increase ticket price immediately as it has hedged a large amount of fuel for the short to medium term. INDIGO India's largest airline announced that it will begin charging fuel fees on both domestic and international flights as of March 14. The charges include 900 rupees per flight to the Middle East, and 2,300 rupees per flight to Europe. Sources say that the company is lobbying for a reduction in fuel taxes by the Indian government. JETBLUE AERWAYS Low-cost airline based in the United States has announced that it will increase fees for optional services, such as checked luggage, due to "rising operating expenses". The airline said that baggage prices would rise either by $4 or $9. Sources with knowledge on the subject have confirmed that KOREAN will be in emergency mode as of April due to rising oil costs. The airline will implement phased responses based on the oil price levels and increase company-wide efficiency to offset surging fuel prices. LUFTHANSA The group announced that it would ground 27 aircraft servicing its CityLine short-haul subsidiary earlier than expected, citing the high cost of jet fuel and industrial action. Lufthansa also plans to withdraw four Airbus A340 600 long-haul planes at the end the summer, and will reduce its short- and medium-haul fleet by five aircraft during winter 2026/2027. PAKISTAN INTERNATIONAL FLIGHTS Fuel surcharges are cited as the reason for raising domestic flight prices by $20, and international fares up to $100. QANTAS AIRWAYS Qantas, Australia's largest airline, said that it has delayed a planned A$150m ($106m) buyback. It also increased its projected fuel bill in the second half 2026 from A$2.5bn to A$3.1bn-A$3.3bn. Scandinavian Airlines announced that it would cancel 1,00 flights in April due to high jet fuel and oil prices. In March, the airline had cancelled "couple hundred" of flights. SAS, which has already raised flight prices, stated that the surge in fuel costs would be a major blow to the aviation industry, even if they tried to absorb them. SPRING AIRLINES Budget Chinese airline announced that it will increase fuel surcharges for domestic flights from April 5. Details to be announced later. SOUTHWEST SOUTHWEST SOUTHWEST SOUTHWEST SOUTHWEST SOUTHWEST SOUTHWAST AIRLINES The American carrier announced that it would increase the fees for checked bags by $10 each for the first two bags. This will bring the cost to $45 and $55 respectively for the first bag. The Portuguese airline claimed that its price increases would partially offset the impact of fuel prices changes on its revenues. THAI AIRWAYS The Thailand-based airline said that it would increase fares between 10% and 15% in order to combat rising fuel prices. TURKISH AIRLINES LUFTHANSA SunExpress, the joint venture between Turkish Airlines, Lufthansa and Lufthansa announced that it would be imposing a temporary fuel surcharge between Turkey and Europe of 10 euros for each passenger starting May 1. The fuel surcharge will be applied to all bookings made after April 1, for departures after May 1. Turkish Airlines announced on April 10, that it would not be distributing any dividends from its net profit for 2025, instead choosing to keep the earnings and preserve cash. T'WAY AIR As part of measures taken to combat the effects of war, the South Korean low-cost airline said that it would furlough cabin crew in May and/or June without pay. UNITED AIRLINES Scott Kirby, CEO of the U.S. carrier, said that the airline will cut unprofitable flights in the next two quarters to prepare for the oil price remaining above $100 by the end 2027. Andrew Nocella, United's Chief Commercial Officer, said that the company was able to increase fares in response to a rapid rise in oil and jet fuel costs. In an email to customers, the airline announced that it would also be increasing first and second checked baggage fees by $10. This applies to all travelers in North America, Mexico, Canada, and Latin America. VIETJET Due to possible fuel shortages, the Vietnamese budget airline has 'adjusted' flight frequencies on certain routes. VIETNAM Airline Vietnam's Aviation Authority announced that the carrier will cancel 23 flights a week on domestic routes starting in April after it requested assistance from the government to remove an environment tax on jet fuel. VIRGIN ATLANTIC Corneel Kster, the CEO of the airline, told The Financial Times that despite adding fuel surcharges on fares this year it will struggle to achieve profitability. VIRGIN AUSTRALIA Virgin Australia has said that it expects an increase of jet fuel costs of between A$30 and A$40 million in the second half of the fiscal year. It also anticipates a 1% decrease in capacity for the fourth quarter. The airline had previously stated that it would adjust fares in order to reflect the rising costs. WESTJET Canadian Press reported that the airline would add a C$60 fuel surcharge ($43) to certain bookings, and also combine flights due to rising costs.
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Aluminium prices fall after Iran declares Strait of Hormuz Open
Aluminum prices dropped on Friday, after Iran's foreign minister announced that all commercial vessels could pass through the Strait of Hormuz for a period of time remaining in the ceasefire. Benchmark 'three-month' aluminium at the?London Metal Exchange was down by 2.6% to $3,549 per metric ton as of 1601 GMT. The reopening of Strait of Hormuz where navigation was largely suspended after U.S. and Israeli attacks against Iran began on 28 February improves prospects for exports of aluminium from the Gulf -region which account for approximately 9% of the global supply. The Strait is used by producers in the area to export the majority of their metals to the world market and to import alumina as a raw material. The Norwegian Shipowners' Association said that there was still caution. They stated that the presence of sea mines and Iranian conditions must be assessed prior to any transit. Ole Hansen is the head of commodity strategy for Saxo Bank. The price of aluminium has risen 18% this year. It had hit a four-year high in the previous session, which was $3,672. This is due to a global supply shortage. In April, a Gulf producer stated that it could take a full year to fully restore production at UAE smelters damaged by an Iranian attack in late March. LME copper increased 0.7% to $13,361.50 per ton, as the dollar fell. This made dollar-priced materials more attractive to buyers who use other currencies. Stocks in the United States and around the world, already trading at record highs, rose even more after Iran's announcement. Other LME metals such as zinc gained?0.2%, reaching $3,429.50 per ton, after having reached $3,482 at its highest level since January 29. Lead rose 0.6% to $2,963, while tin rose by 0.7% to $53,355, and nickel dropped 0.9% to $8,060. (Reporting and editing by David Goodman Elaine Hardcastle, Nick Zieminski, and Polina Devitt)
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Wall Street indexes rise after Iran declares Strait of Hormuz "completely open"
Investors hailed Iran's decision on opening the Strait of?Hormuz, which boosted the S&P?500, the Nasdaq, and the Dow. Abbas Araqchi, Iran's Foreign Minister, said in a posting on X that the Strait of Hormuz would be "completely opened" to all commercial vessels for the remaining 10 days of the truce agreed in Lebanon between Israel and Iran-backed Hezbollah. The U.S. president Donald Trump had said that Washington would soon be able to secure a peace deal with Iran. Oil prices fell over 11% as markets became more confident that the end of the "war" was near. This eased inflation fears. The Strait of Hormuz plays a crucial role in global oil flow. The opening of the Strait of Hormuz was a crucial step in normalizing the transit of the waterway. The reopening has a limited scope, said James Reilly - senior markets economist at Capital Economics. "That being said, it is an important and necessary step to potentially ending the conflict." Exxon Mobil and Chevron both fell by 5.7% and 4.5% respectively. American Airlines and United Airlines both saw their stocks rise by more than 7%. Cruise operators Cruise and Norwegian Cruise Line rose by 8.7% and 7.5% respectively. The CBOE Volatility Index hit a new low of two months and last fell 0.97 points to 16.97. At 11:31 am. The Dow Jones Industrial Average gained 958.20, or 1.99%, to 49.537.12, while the S&P 500 rose 90.30, or 1.12%, to 7,131.58, and the Nasdaq Composite added 391.43 or 1.52% to 24,494.14. All three indexes are on track to have their third week of gains. The Nasdaq Composite is on track to extend its winning streak to 13 days, the longest since January 1992. Russell 2000 small-caps hit their first intraday high since the U.S. - Iran conflict erupted. Some analysts warned that there are still logistical issues for ships trying to cross the Strait of Hormuz. Erik Bethel is the general partner at the maritime investment firm Mare Liberum. Netflix fell 9.6% when it announced earnings for the current quarter that were below expectations. Reed Hastings, co-founder of Netflix and its longtime chairman, resigned after 29 years. Alcoa's stock fell 7.9% following a report that the aluminum producer had reported a first-quarter revenue and profit below analyst estimates. The company cited high costs and a softening of demand. After reporting earnings for the first quarter, Fifth?Third Bancorp's shares rose by 1.2%. Based on the Fed-funds futures prices, markets are pricing in a 50% probability that interest rates will be cut by the central bank in December. According to LSEG compiled?data, this is a dramatic change from a?20% chance earlier in the day. On the NYSE, advancing issues outnumbered declining ones by a ratio of 4.38 to 1 and by a ratio of 3.62 to 1 on the Nasdaq. The S&P 500 recorded 38 new 52-week lows but no new highs. Meanwhile, the Nasdaq Composite registered 188 new highs while 22 new lows. (Reporting and editing by Tasim Zaid in Bengaluru, Avinash P from Bengaluru)
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Oil price drop and reopened Strait of Hormuz may change Fed's options on future rate cuts
The Federal Reserve's policymakers face a complex outlook as they prepare for their meeting on April 28-29. The reopening of Iran's Strait of Hormuz has caused oil prices to fall below $90 per barrel for the first?time in over five weeks. U.S. Central Bank officials are now assessing the damage that the seven-week conflict had done to price trends and whether the hostilities have ended for good. Iran announced on Friday that it will reopen the Strait of Hormuz, which is responsible for about a fifth the world's supply of oil, to shipping during the current ceasefire between the U.S. and Israel. The global oil price, which had been hovering around $95 per barrel, plunged to $89 and traders of contracts linked to Fed interest rate changed their views from the central banks remaining inactive until 2027 to the Fed resuming rate cuts as early as this year. Neil Dutta is the head of Renaissance Macro Research's economic research. He said that the Fed could now set aside the concerns about stagflationary fears of increased inflation and a slowing of growth due to the oil shock, and pursue rate reductions on the basis of a renewed decline in inflation. In a note, he said that the consumer's purchasing power would improve and they would spend less money on basic items like gasoline. According to AAA, the average gasoline price has already dropped from its recent high of $4.15 per gallon to $4.07 per gallon on Friday. Mary Daly, the San Francisco Fed president, said in a recent interview that the Fed could be influenced by the outcome of the conflict and how oil prices might respond if hostilities eased. Daly stated in an interview that "as long as the conflict is resolved quickly, it will take longer but it won't stop the progress". It just takes a little longer for everything to be resolved." The Fed will likely keep its overnight benchmark interest rate at 3.50% to 3.75% when it meets later this month. Inflation has not improved in recent months, and there are new risks surrounding its direction. The Fed's language was becoming more hawkish, as the concern grew that the Middle East war, which lasted seven weeks, was not just a disruption they could "look past" but rather was causing broader price pressures. In remarks made this week, New York Fed President John Williams began to sketch out the conditions that had already begun to play themselves out in the form of increased fuel costs, larger supply chain problems, and higher airfares and groceries. Williams, a vice-chair and permanent voter in the Federal Open Market Committee of the central banks, said "even based upon what we have seen so far, inflation will be above 3% within the next few month." This is a major miss by the Fed, and a move in the wrong direction based upon the Personal Consumption Expenditures Prices Index, which the central bank uses as metric to set its inflation targets. In February, which is the last month where data are currently available, the headline PCE, excluding energy and food, was 2.8% year-over-year. The core measure was 3%. Analysts expect that the core PCE will have increased to 3.2% by March. This data will be released on April 30th, a day following the Fed's second meeting. Consumers may be eligible for a possible relief The Fed's view on the economy, inflation, and interest rates will be affected by the latest events if the apparent progress in resolving the conflict continues. This could drive oil prices lower. The President Donald Trump labeled this week as "fake", the inflation that occurred as a consequence of his decision launch air strikes against Iran. A sharp rise in the Consumer Price Index headline in March was the fastest since 2022, when former President Joe Biden led the surge in inflation during the pandemic era. Economists do not include energy or food prices in the "core" concept that captures inflation trends better. Fed officials and comments from the Fed’s “Beige Book” survey of economic reports around the country began to focus on higher core prices that policymakers saw as possibly developing due to the energy shock. As firms reset their charges to account for increased input costs and fuel and energy contract adjust to?account? for market pricing, they began to see this increase in core inflation. If the relief in oil price is sustained, it will be felt by consumers who can now spend more on other goods and services. This could boost economic growth. Stephen Miran, Fed Governor, said this week that every dollar consumers spend on higher energy costs is $1 less they can spend on other items. He was advocating for a rate reduction at the Fed meeting next week. "I don’t think this is the kind of thing that will drive us into a recession, but I do believe it's going to be a drag on the growth. And in a labor markets that were very slowly drifting away form full employment, that's something that could make you worried." Reporting by Howard Schneider, Ann Saphir and Chizu Nomiyama. Editing by Paul Simao and Chizu Simao.
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Oil drops by 13% when Iran declares Strait of Hormuz Open
The oil prices fell by 13% after Iran's Foreign Minister said that the Strait of Hormuz would remain open to all commercial vessels for the remainder of the ceasefire period. U.S. president Donald Trump also said Iran had agreed not to close the strait ever again. Brent crude futures dropped $12.87 or 12.95 percent to $86.52 per barrel at 10:50 am EDT (1450 GMT) after hitting a session's low of $86.09. U.S. West Texas Intermediate Crude Futures fell $13.50 or 14.26% to $81.19 per barrel after reaching $80.56. Both contracts traded at their lowest since March 10 and were set to experience their biggest daily declines since the 8th of April. Abbas Araqchi, Iranian Foreign Minister, said that the Strait of Hormuz is open after the ceasefire agreement in Lebanon. The comments from Iran's Foreign Minister indicate that the situation will de-escalate as long as a ceasefire is maintained. We now need to determine if the number tankers crossing through the Strait has increased significantly," said UBS analyst Giovanni Staunovo. PROGRESS in Negotiations According to a reporter from Axios on X, the U.S. and Iran have made progress with the negotiations of a three-page Memorandum to End the War. Prices fell earlier in the session, as investors hoped that the Middle East war could be coming to an end. Trump addressed a sticking issue in the talks by saying that Tehran had offered not to possess nuclear weapons for over 20 years. We'll see what happens. Trump said to reporters on Thursday outside the White House, "I think we are very close to making an agreement with Iran." Trump said that on Friday the United States had banned Israel from further bombing Lebanon. He used a more harsh tone with this long-time U.S. allie than usual. A U.S. official stated that the military blockade against Iran, which involves more than 10,000 personnel, remains in place shortly after the announcement of?the opening of?the Strait. The analyst Ole Hvalbye of SEB Research stated that while the opening of the strait is a positive step, the European market will remain 'tight' for some time, as it takes about 21 days for ships from the Gulf to Rotterdam - the main crude port for the region. Tamas Varga is an analyst with PVM Oil Associates. He said that traffic could be stopped again in the Strait if an agreement on Iran's nuclear plans and the lifting of U.S. sanctions remain elusive. Reporting by Georgina Mccartney in Houston; Robert Harvey, Ahmad Ghaddar and Shadia Nasralla in London; Helen Clark in Perth. Editing by Louise Heavens and Kirby Donovan.
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Sources say that Brazil's battery manufacturers are pushing for assistance to prevent imports from dominating the market.
Three sources with knowledge of the situation have confirmed that three Brazilian battery manufacturers including WEG Moura, and UCB Power, have requested the government create incentives to encourage the use of locally-made products at the country's first auction for battery energy storage. They want to avoid imports not being able to meet the demand. Sources said that the proposals include incentives via scoring criteria, and financing by the state development 'bank BNDES. It is important to curb the dominance of imports from China and other countries, especially in order to ensure that Brazil's BESS industry, which is a fast-growing sector, does not dominate the market. Unnamed domestic industry executives said that if they competed on an equal basis, like?in a normal auction?, "it's very likely that we would lose it all." The auction is expected to take place this year and has attracted interest from global suppliers such as China's?BYD and CATL, as well a U.S.-based Tesla. Sources say that the BESS industry will still depend on imported batteries, but could produce other components locally, including battery packs, software, inverters, and infrastructure. Moura 'and UCB both said that they were contributing to the discussion and that strengthening domestic?industry can support Brazil's growth through job creation -and- technological innovation. WEG declined comment. The Ministry of Development, Industry and Trade stated that it is examining local content rules for the auction and details are still being discussed. The Ministry of Mines and Energy has not responded to any requests for comments. Reporting by Leticia Fukuchima, Writing by Isabel Teles and Editing by Rod Nickel
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Data shows that the Russian oil price has exceeded budget by 46% in April.
Calculations showed that the Russian oil price, in roubles,?used to calculate taxes? exceeded the level assumed in federal budgets by?46% during the first half of April due to a rise in global oil prices. Due to the unprecedented disruption in supply caused by the U.S. and Israeli war against Iran, the global oil prices rose 50% in March. This was a record-breaking run. This month, they have fallen below $100 per barrel and further weakened this week due to the anticipation of a peace deal. Anton Siluanov, Minister of Finance in Russia, said that oil is the main export for the country. The calculations are based on the data of sources. According to these, the average Russian price for oil in roubles used in taxation reached 7,947 Roubles ($105 per barrel) in April 1-15. This is up by 28% compared to March and 46% higher than the 5,440?roubles assumed in this year's federal Budget. Faced with lower oil export revenues before the price spike, 'Russia' ran a deficit in the first quarter '2026 of 1.9% of its gross domestic product, exceeding the annual target of 1.6%. To cover the deficit, it sold foreign currency out of the fiscal reserve fund.
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Wall Street indexes rise after Iran declares Strait of Hormuz "completely open"
Wall Street's major indexes rose Friday after investors hailed Iran's decision, following the ceasefire agreement in Lebanon, to open up the Strait of Hormuz. Abbas Araqchi, Iran's foreign minister, announced?in a X post that the Strait of Hormuz would be "completely opened" to?all commercial vessels for the remaining 10 days of the truce agreed in Lebanon between Israel forces and Iran-backed Hezbollah. The announcement comes after U.S. president Donald Trump said that Washington would soon be able to secure a peace deal with Iran. This resolution will drive the markets higher. "Neither the administration nor anyone else in their right minds trusts what Iran says. But actions matter,"?said Joseph Trevisani. Senior analyst at FXStreet. Crude prices dropped 10.6% after the news that commercial shipping would resume through the waterway. S&P 500's energy sector fell 4.5%, with Exxon Mobil slipping 5% while Chevron dropped 4%. American Airlines and United Airlines both saw their stocks rise by more than 7%. Cruise operators Norwegian Cruise and Carnival Cruise rose by 8.5% and 8%, respectively. The CBOE Volatility Index hit a new low of two months and last fell 0.17 points to 17.77. Investors have been encouraged to buy risk assets by the prospect of a de-escalation. S&P 500 and Nasdaq Composite both closed at record levels on Thursday. If the current trend continues, this would bring the Nasdaq winning streak to 13 days, its longest ever since January 1992. The three indexes are also on track to gain for a third week in a row. Small-cap Russell 2000 reached its first intraday high since the U.S. - Iran conflict erupted. It joined other major indices that have hit all-time records. At 9:45 a.m. At 09:45 a.m. ET, the Dow Jones Industrial Average gained 554.22 points or 1.14% to 49,136.99. The S&P 500 rose 54.59 points or 0.78% to 7,095.87. And the Nasdaq Composite increased 252.37 points or 1.05% to 24,355.07. Information technology was the sector that gave the benchmark the most boost, with a rise of 2%. Consumer discretionary led the gains with a rise of 2%. Investors focused on earnings on Friday as there were no major economic reports scheduled to be released. Netflix fell 10.7% when it announced earnings for the current quarter that were below expectations. The slide comes after co-founder Reed Hastings, who has been chairman for 29 years, stepped down. Alcoa's share price fell by 9% following the announcement that its first-quarter revenue and profit were below analyst estimates. The company cited high costs and a softening of demand. Fifth Third Bancorp's shares rose by 1.2% following the release of its first-quarter results. The central bank commentaries will also be a focus. San?Francisco Fed president Mary Daly, Richmond Fed president Tom Barkin, as well as Federal Reserve Governor Christopher Waller, are scheduled to speak. Recent remarks by Fed officials, however, have only had a limited impact on expectations of rates. Based on fed-funds forward prices, the markets are pricing in a 60% probability that interest rates will be cut by the central bank in December. According to LSEG data, this is a 'dramatic change' from a 20 percent chance earlier in the day. On the NYSE, advancing issues outnumbered declining ones by a ratio of 3.94 to 1 and by a ratio of 3.91 to 1 on the Nasdaq. The S&P 500 recorded 23 new 52-week lows, while the Nasdaq Composite registered 123 new highs. (Reporting and editing by Tasim Zaid in Bengaluru, Avinash P from Bengaluru)
The Fed may reconsider its options in the future if oil prices fall and the Strait of Hormuz is reopened.
The reopened Middle East Shipping -and the plummeting of oil prices on Friday --boosted bets that the U.S. Federal Reserve could begin reducing interest rates as early as December. However, officials face a 'tangled' outlook before their policy meeting April 28-29.
The announcement by Iran of the reopening of Strait of Hormuz has pushed crude oil prices below $90 per barrel for the very first time in over five weeks. But Fed officials are not optimistic.
They still have to determine how much damage has been done by the conflict, if it is over, and if they feel confident that inflation will fall to their 2% goal. Iran announced on Friday that it would reopen its strait for shipping during the duration of the ceasefire with the U.S. Oil prices, which had been stuck at $95 per barrel, plunged to $89 and traders of contracts linked to Fed interest rates changed from believing that the central bank would remain inactive until 2027 to expecting a return to rate cuts this year.
Mary Daly, the San Francisco Fed president, said in a recent interview that the Fed could be influenced by the easing of hostilities and how oil prices might respond.
Daly stated that "as long as the conflict is resolved quickly, we will be in a position where it takes longer but doesn't stall progress" with inflation. It just takes longer to get all of that sorted out. Reporting by Howard Schneider, Ann Saphir and Chizu Nomiyama. Editing by Chizu nomiyama.
(source: Reuters)