Western Markets Wrap : NASDAQ, DOW, S&P end marginally lower. Brent Crude retreats to $100 mark

8 May 2026 , 02:30 PM

Market Briefs

United States — S&P 500 | 7,337.10 | -0.38% | Nasdaq | 25,806.20 | -0.13% | Dow Jones | 49,601.95 | -0.63%

All three major US indices gave back part of their recent rally on May 7 after touching fresh all-time highs earlier in the session. The pullback was led by technology and semiconductor stocks as traders locked in profits following Wednesday’s sharp AI-driven surge.

The Dow briefly crossed the symbolic 50,000 mark intraday before reversing lower and closing down more than 314 points. Investor sentiment remained cautious throughout the session as markets awaited clarity on the ongoing US-Iran peace negotiations.

United Kingdom — FTSE 100 | 10,276.95 | -1.55%

The FTSE 100 was the weakest among major Western indices, falling 161.71 points as lower crude prices dragged energy majors lower. Shell and BP both declined more than 2%, weighing heavily on the index given their large weightings.

Utility stocks including Centrica, Severn Trent, United Utilities, and SSE also came under pressure, falling between 2% and 5%. Shell reported better-than-expected quarterly earnings but reduced its share buyback programme from $3.5 billion to $3 billion, disappointing investors.

Travel and hospitality names were among the few gainers. InterContinental Hotels rose 3.6%, International Airlines Group gained 2.7%, and Burberry added 2.46% as easing fuel prices improved sentiment toward the sector.

Germany — DAX | 24,663.61 | -1.02%

Germany’s DAX closed lower by 255 points as profit-taking spread across European equities following recent record highs. Semiconductor and industrial stocks led the decline, mirroring weakness in US technology shares.

The broader mood remained risk-off as investors monitored developments surrounding Iran’s response to the latest US peace proposal and continued uncertainty around Middle East shipping routes.

Commodities — Brent Crude | $100.06/bbl | -1.19% | WTI Crude | $94.81/bbl | -0.28% | Gold Spot | ~$4,685/oz | -0.13%

Crude oil prices continued to retreat from the elevated levels seen earlier this week, with Brent briefly falling below the $100 mark before recovering modestly into the close.

The decline was driven by growing optimism that diplomatic negotiations between the US and Iran could eventually reopen the Strait of Hormuz and restore disrupted oil supply flows.

Gold prices edged slightly lower as safe-haven demand softened alongside improving geopolitical sentiment, though bullion continued to hold firmly above the $4,680 level.

Key Global News

Iran Reviewing US Peace Proposal — Strait of Hormuz Remains the Key Focus

The United States sent a 14-point memorandum to Tehran through Pakistani mediators, proposing a formal end to the conflict in exchange for reopening the Strait of Hormuz within 30 days, accepting nuclear restrictions for 12–15 years, and receiving phased sanctions relief.

Iranian officials confirmed they are reviewing the proposal, although a senior member of Iran’s Expediency Council publicly rejected the terms and demanded war reparations before any agreement.

President Trump cautioned that no agreement had been finalised and warned that military strikes remained possible if negotiations collapsed. Both sides continue maintaining competing naval blockades across the Strait of Hormuz, which handles roughly one-fifth of global oil and gas trade.

This remains the single most important macro development for India. Any sustained reopening of the Strait would sharply reduce crude import costs, stabilise the Rupee, ease inflationary pressure, and improve India’s current account outlook. Prolonged disruption would also threaten remittance flows from Indian workers across Gulf economies.

Crude Prices Retreat Further — Relief for Oil-Importing Economies

Brent crude settled at $100.06 per barrel while WTI closed at $94.81, extending the sharp correction from levels above $115 earlier in the week.

The move lower was driven by hopes of restored supply flows through the Strait of Hormuz and growing confidence that a broader regional escalation may be avoided.

The International Energy Agency stated that nearly 14 million barrels per day of global supply remains disrupted due to the conflict and warned that any recovery in production capacity would likely be gradual.

For India, every sustained $10 decline in Brent crude significantly reduces the import burden, eases pressure on fuel inflation, lowers logistics costs, and gives the RBI greater flexibility on monetary policy. Oil direction will continue to be the most important sentiment driver for Indian equities in the near term.

Norway’s Central Bank Surprises Markets With Rate Hike

Norges Bank raised its benchmark interest rate by 25 basis points to 4.25%, becoming the first European central bank to tighten policy since the Middle East conflict began.

Governor Ida Wolden Bache cited persistent inflationary pressure and continued energy market uncertainty as key reasons behind the decision. Norway’s inflation rate remained well above target at 3.6% in March, while core inflation has stayed elevated for more than 18 months.

The move surprised markets, with only a minority of economists expecting a hike at this meeting. The bank also signalled that another increase later in 2026 remains possible if inflation risks persist.

For India, the decision reinforces the view that global central banks may remain hawkish for longer due to energy-driven inflation risks. That keeps US bond yields elevated, supports a stronger Dollar, and can limit foreign capital flows into emerging markets including India.

Semiconductor Stocks Slide After Massive AI Rally

Major semiconductor stocks including AMD, Micron Technology, and Lam Research fell roughly 4% after rallying strongly in the previous session.

The weakness was largely attributed to profit-taking following AMD’s sharp earnings-driven surge, which had been fuelled by strong AI demand guidance and upbeat commentary around agentic AI infrastructure spending.

Broadcom and Micron also weighed on both the S&P 500 and Nasdaq despite the broader long-term AI spending narrative remaining intact.

Datadog was a notable outlier, surging 28% after delivering stronger-than-expected quarterly earnings and issuing robust forward guidance.

For Indian IT companies, the broader AI capex cycle remains highly supportive. Continued investment by US hyperscalers into AI infrastructure translates into stronger cloud, analytics, and AI services demand for Indian technology exporters. However, persistent volatility in global semiconductor stocks could temporarily pressure sentiment toward Indian IT valuations.

US Labour Market Remains Resilient — Fed Rate Cut Expectations Stay Delayed

Initial US jobless claims came in at 200,000 for the week ending May 2, below market expectations of 206,000 and signalling continued labour market resilience.

Continuing claims also declined modestly to 1.77 million, while hiring activity remained healthy. First-quarter productivity growth came in slightly below expectations, while unit labour costs rose modestly but remained manageable.

The data reinforced expectations that the US economy continues to remain resilient despite elevated interest rates.

For India, a strong US labour market supports consumer demand and revenue visibility for Indian IT and outsourcing firms that depend heavily on US corporate spending. At the same time, resilient economic data reduces the probability of near-term Federal Reserve rate cuts, keeping the Dollar firm and potentially limiting short-term foreign inflows into Indian equities and bonds.