Asian shares showed mixed results Monday while Brent crude oil prices steadied above $104 a barrel following U.S. President Donald Trump‘s announcement that the United States would purchase diesel from Russia, a move that attracted criticism from some lawmakers.
U.S. stock futures edged 0.2% higher after Wall Street finished its record-setting week with gains. On Friday, the S&P 500 climbed 0.6% and the Dow Jones Industrial Average added 0.8%. The Nasdaq composite rose 0.6%.
Russian Diesel Deal Sparks Controversy
Trump announced on social media Friday that he struck a deal to buy Russian diesel with Russian President Vladimir Putin during a phone call, aiming to address a spike in fuel prices ahead of the November 3 U.S. midterm elections. The president stated Russia will immediately supply more than 300,000 tons of diesel to the American and global market, followed by an additional 500,000 tons in November and 1 million tons “immediately thereafter.” He added that Russia will deliver an additional 3 million tons “within a short period of time” after that.
The plan runs counter to U.S. efforts to cut revenue from oil and gas sales that can fund Russia’s war against Ukraine. Trump also claimed Russia and Ukraine had agreed to an “energy ceasefire” in the ongoing conflict, though Kyiv reported attacks by Moscow on energy sites after his statement. A bipartisan group of six senators called Sunday for the administration to “immediately reverse course” on the plan.
Oil Prices and Corporate Earnings Outlook
The price of Brent crude, the international standard, edged 0.1% higher to $104.76 per barrel early Monday. U.S. benchmark crude oil fell 0.4% to $91.50 per barrel. Oil prices have continued to yo-yo because of uncertainty about when the war with Iran will allow the global energy industry to return to normal.
Share prices have surged upward, supported by expectations of strong corporate profits, even as Americans report feeling squeezed by high inflation. A preliminary University of Michigan report indicated U.S. consumers are raising their forecasts for inflation, expecting 4.7% this year, up from 4.6% a month ago and 3.4% before the Iran conflict began. Consumer sentiment is declining most sharply among lower-income Americans with limited stock investments.
Earnings reports from major banks, including Citigroup, JPMorgan Chase, and Wells Fargo scheduled for Tuesday, will test whether companies can deliver strong profit growth after stock prices approached record highs despite pressure from rising bond yields.
In currency markets, the U.S. dollar rose to 158.43 yen from 158.23 yen, while the euro remained unchanged at $1.1191.
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