Shares in Asia posted gains on Friday, though numerous markets across the region remained closed in observance of May Day holidays. Brent crude oil maintained its position at $111.66 per barrel, while the U.S. benchmark crude added 46 cents to reach $105.53 a barrel.
Market Highlights in Asia
In Tokyo, the Nikkei 225 index advanced by 0.7% to close at 59,687.65, as the Japanese yen strengthened against the U.S. dollar. The dollar traded at 157.16 yen, up from 156.61 yen late Thursday, but remained well below the 160 yen threshold touched on Thursday. Australia's S&P/ASX 200 surged 1% to 8,750.40.
U.S. futures pointed higher after Wall Street equities rallied to fresh records on Thursday, buoyed by robust quarterly earnings from major corporations including Alphabet and Caterpillar. The gains followed volatile swings in oil prices, which had climbed toward their highest levels since the onset of the Iran conflict before retreating.
Wall Street Records
The S&P 500 jumped 1% to surpass its previous all-time high, closing at 7,209.01 and capping its best monthly performance in over five years. The Dow Jones Industrial Average soared 1.6% to 49,652.14, while the Nasdaq composite climbed 0.9% to a record 24,892.31.
Alphabet led the charge, rallying 10% after the parent company of Google and YouTube reported quarterly profits that nearly doubled analysts' expectations. Chief Executive Sundar Pichai noted that investments in artificial intelligence "are lighting up every part of the business."
This marked the latest instance of a company delivering stronger-than-anticipated earnings for the start of 2026, despite elevated oil prices and economic uncertainty.
Oil Market Dynamics
Friday brought a measure of calm to oil markets, which had experienced sharp gains on Thursday amid concerns over the prolonged impact of the war on crude supplies. Iran has closed the Strait of Hormuz to oil tankers, stranding vessels in the Persian Gulf and disrupting global deliveries, while a U.S. Navy blockade prevents Iran from selling its own oil. Traders have been actively buying and selling contracts for various grades of oil across multiple months.
In the most actively traded segment of the Brent crude market, for July delivery, prices peaked at $114.70 per barrel before retreating to around $107 and settling at $110.40 on Thursday, virtually unchanged from the prior day. The peak price for this contract during the conflict has been $119.50, set last month. In a less liquid corner of the market, June delivery briefly exceeded $126 overnight before pulling back toward $114. Brent crude was trading at approximately $70 before the war began.
Corporate Earnings Impact
In share trading, Caterpillar surged 9.9%, Eli Lilly jumped 9.8%, and O'Reilly Automotive leaped 8.4% after all reported quarterly profits that topped analysts' estimates. This is significant because stock prices tend to track corporate earnings over the long term.
Meta Platforms tumbled 8.7% despite beating profit expectations, as investors focused on its increased forecast for spending on data centers and other investments to build out AI capabilities. Doubts persist among some investors about whether the heavy spending on AI will generate sufficient profits and productivity gains to justify the outlay. Microsoft fell 3.9% after similarly raising its capital expenditure forecast. Amazon rose 0.8% after swinging between gains and losses, having exceeded earnings expectations for the quarter.
Bond Market and Economic Data
In the bond market, Treasury yields eased as oil prices retreated. Reports indicated that U.S. economic growth slowed more than expected in the first quarter, while inflation in March worsened roughly as anticipated. A separate report showed fewer U.S. workers applied for unemployment benefits last week, suggesting layoffs remain limited despite major workforce reductions announced by some companies.
London's FTSE 100 jumped 1.6% after the Bank of England held its main interest rate steady, following similar decisions by the U.S. Federal Reserve on Wednesday and the Bank of Japan on Tuesday.
