What’s News in Markets: Persian Gulf Oil Damage, Defense Stocks Under Fire, AI Revivals

SPEAKER_1 (0:00)

Harvard Business School Executive Education delivers a world class learning experience that energizes aspiring and established change makers. Prepare for the next elevation for your organization and for yourself. Learn more at hbs.me slash breakthrough. That's hbs.me slash breakthrough.

Imani Moise (0:18)

Hey, listeners. It's Saturday, April 25th. I'm Imani Moise for The Wall Street Journal. And this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's dive in. It was another week of records for markets. The S&P 500 and NASDAQ hit new highs. Strong tech results overshadowed both ongoing anxiety over the war and surging oil prices. But the rally wasn't smooth. Stocks swung throughout the week as headlines about the conflict in the Middle East shifted and investors weighed a mixed batch of corporate earnings. Still, the NASDAQ rose 1.5 percent to a new record driven by tech companies cashing in on AI. The S&P 500 added about half a percent and the Dow Jones Industrial Average slipped 0.4 percent.

Energy stocks were one of the biggest winners in the S&P 500, rising about 3 percent over the week as investors bet disruptions in the Middle East will keep oil prices elevated for longer than expected. The conflict between the US and Iran has effectively brought traffic in and out of Persian Gulf close to a standstill, cutting off one of the world's most critical oil supply routes.

Even if the conflict were resolved quickly, analysts and oil industry executives say the damage to global energy infrastructure could take months or even years to fully unwind. Oil fields have been shut down, workers have fled the region, and restarting production is expected to be slow and costly. Brent crude, the international oil benchmark, surged nearly 17% this week to finish at $105.33 a barrel.

You'd think the world would be good for defense stocks, but major contractors like Northrop Grumman and Lockheed Martin were among the worst performers this week. Even though both companies reported a surge in demand as they reported earnings, investors aren't convinced that's translating into better returns. Lockheed Martin missed Wall Street estimates for both sales and profit despite rising global demand for weapons and munitions. The company also burned through more cash than expected, raising concerns that higher costs and heavy investment could eat into returns. Shares in Lockheed Martin fell about 13% on the week, while Northrop Grumman also dropped roughly 13% despite reporting a jump in sales and profit. Some of that growth may already be priced in after a strong run earlier this year. Even with this week's pullback, both stocks are still up for the year.

And tech stocks helped lift markets, as the AI boom gave some legacy players a new lease on life. Intel shares surged more than 20% over the week, after the Silicon Valley pioneer reported stronger than expected first quarter sales. That rally sent the company's shares to a record high of $82.57.

Its first record closed since 2000, at the height of the.com mania. The rise of AI agencies driving demand for CPUs, the core engines of most computers, and Intel's specialty. Another company that once looked at risk of falling behind, is now finding new relevance in the AI era. Nokia rose 3.5% this week, after the former phone maker reported a 12% increase in sales, tied to demand from AI and data center customers.

Now you know what's news in markets this week. You could read about more stocks that moved on the week's news in our live markets coverage on wsj.com. Today's show was produced by Pierre Bienimé with supervising producer Melanie Roy. I'm Imani Moise. Have a great weekend and see you next Saturday.

SPEAKER_3 (4:07)

The world is transforming faster than ever, and standing still isn't an option. At Oppenheimer, we're working at the forefront of the innovation economy to invest where progress begins, finding opportunities that build and protect wealth for individuals and institutions that want a seat at the edge of tomorrow.

Put the power of Oppenheimer thinking to work for you. Wealth management, capital markets, investment banking.