Oil prices steady after OPEC+ extends output cuts

Equities

On the last trading day of May, the FTSE 100 recorded a modest rise of 0.5%. Meanwhile, the mid-cap FTSE 250 index also saw gains, ending the day up by 0.3%. Despite this, both indices closed the week on a lower note.

JD Sports Fashion slid 4.7% after the company announced that its profit outlook would remain unchanged, disappointing investors who had anticipated positive revisions. On the other hand, National Gridemerged as a standout performer, with its stock increasing by 4.7%.

Shifting focus to the US, the Dow Jones Industrial Average concluded the month with standout gains of 1.51%, marking its best daily gain since November 2023. The S&P 500 also advanced, rising by 0.8%. However, the Nasdaq Composite slightly bucked the positive trend, edging down by 0.01%.

Dell Technologies saw a dramatic fall, with its shares plummeting by 17.9%. This steep decline was prompted by its forecast that projected current-quarter profits would fall below market expectations, coupled with concerns over rising costs associated with enhancing server capabilities for heavy AI workloads. In contrast, Zscaler saw its stock jump by 8.5% after it forecasted fourth-quarter results that surpassed analysts’ expectations, signalling strong business momentum.

Trump Media & Technology Group also made headlines with a 5.3% drop in its stock value following the conviction of former President Donald Trump on charges related to financial misconduct.

Forex & Commodities

The US dollar had its first monthly decline in 2024, with the dollar index dropping 0.12% on Friday to a value of 104.64. That followed the release of the US inflation data for April, which met expectations but did not provide clear indications about the potential timing of interest rate cuts by the Federal Reserve. The inflation figures, reported at a 0.3% increase, seemed to maintain investor uncertainty regarding the Federal Reserve’s next moves.

In the Eurozone, the euro appreciated slightly by 0.13% to $1.0847 against the dollar, influenced by inflation data that suggested price pressures were accelerating more than expected across several major economies including France, Germany, and Spain. This has complicated the European Central Bank’s (ECB) policy outlook, though the market still anticipates an ECB rate cut in the coming week.

Gold prices remain stable at around $2,322 per ounce, reflecting cautious investor sentiment as they awaited further US economic data.

Oil prices showed little change with Brent futures slightly down at $81.07 a barrel. This followed a decision by OPEC+ to extend output cuts, which was seen as an effort to manage supply but did not drastically alter price expectations. Although the total cuts amount to a substantial 3.66M bpd, most of it - about 2.2M - comes from the voluntary scheme