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April 28, 2026 – 07:56

(Bloomberg) — Oil extended its rally and stocks dropped amid little progress on reopening the Strait of Hormuz. The yen edged higher after the Bank of Japan kept its policy rate unchanged in a split decision.

Brent rose as much as 2.9% to $111.32 a barrel, before paring gains, as the commodity rallied for a seventh consecutive day. The White House said US officials were discussing Iran’s latest proposal but maintained “red lines” on any deal to end the eight-week war. Higher oil prices pushed down bonds with with the yield on the 10-year Treasury rising one basis point to 4.35%. The dollar rose, while gold fell 1% to $4,630 an ounce.

Meanwhile, the yen strengthened 0.2% to around 159 per dollar and Japanese government bonds fluctuated after BOJ policymakers voted 6-3 to keep policy on hold. The decision pushed the odds of a rate hike in June to more than 70%, with traders awaiting Governor Kazuo Ueda’s press conference at 3:30 p.m. in Tokyo.

Higher oil prices and key risk events coming up later this week curbed enthusiasm for stocks. The MSCI Asia Pacific Index dropped 0.3% after hovering around levels seen when the US-Israel war on Iran started in late February. Technology shares did better than the broader market with South Korean stocks gaining 0.6%, eclipsing the UK to become the world’s eighth-biggest stock market.

With the Federal Reserve due to announce its policy decision Wednesday amid geopolitical uncertainties, investors are turning their focus to earnings from tech giants to test whether the recent rally in stocks can be sustained. Global equities have erased their war-driven losses — even as crude oil prices remain elevated — in part due to the return of the AI trade.

“The recent rally in Asia tech, despite ongoing supply chain disruption, suggests investors are increasingly looking through near-term geopolitical risks,” said Gary Tan, a fund manager at Allspring Global Investments. “But a sustained re-rating versus the US will likely hinge on capex signals from hyperscalers in this week’s earnings reports.”

Elsewhere, futures contracts for the S&P 500 Index slipped 0.1% with the underlying gauge staying on track for its strongest monthly performance since 2020. European shares were set for a flat open.

Markets have recovered to new all-time highs while seemingly ignoring continued geopolitical risks that abound, and this has been done largely on the back of positive earnings revisions and expectations, said Walter Todd, president and chief investment officer at Greenwood Capital Associates.

“Any cracks that emerge in this outlook as the largest companies report in coming weeks pose a significant risk to market momentum,” he said.

Alphabet Inc., Microsoft Corp., Amazon.com Inc. and Meta Platforms Inc. report on Wednesday, followed by Apple Inc. a day later. Asian companies are also heading into the busiest week of the current earnings season, offering investors an early glimpse of how the Iran war has affected results.

Also this week, along with the BOJ and the Fed, the European Central Bank and peers in the UK and Canada are all set to decide on interest rates, together deciding monetary policy for about half of the world’s economy.

While investors expect them to leave rates unchanged, markets will be on alert for signs officials, including Fed Chair Jerome Powell and ECB President Christine Lagarde, are worried about the inflation threat posed by the disruption to oil supply stemming from the war.

“The tone of the press conference will emphasize the prudence of the ongoing wait-and-see stance, although we suspect that investors are nearing the point at which one might expect the Fed to have a stronger conviction take on the fallout from the energy shock – even if that is unlikely to be communicated in its entirety,” said Ian Lyngen at BMO Capital Markets.

Corporate Highlights:

Novartis AG reported profit below analysts’ estimates and an unexpected sales decline as some of its best-selling medicines were hard hit by generic competition. Contemporary Amperex Technology Co. Ltd. priced its Hong Kong share placement at the bottom of a marketed range, according to terms of the deal seen by Bloomberg News. Microsoft Corp. and OpenAI have agreed to drop the software giant’s exclusive right to sell the startup’s AI models, opening the door for the ChatGPT maker to pursue deals with cloud-computing rivals like Amazon.com Inc. Italian drugmaker Angelini Pharma is exploring a potential acquisition of Catalyst Pharmaceuticals Inc. as it looks at deals to expand its footprint globally, people familiar with the matter said. Some of the main moves in markets:

Stocks

S&P 500 futures fell 0.1% as of 6:50 a.m. London time Nasdaq 100 futures fell 0.3% The MSCI Asia Pacific Index fell 0.3% The MSCI Emerging Markets Index fell 0.6% Japan’s Topix rose 0.7% Australia’s S&P/ASX 200 fell 0.7% Hong Kong’s Hang Seng fell 1% The Shanghai Composite fell 0.5% Euro Stoxx 50 futures were little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro fell 0.1% to $1.1708 The Japanese yen rose 0.2% to 159.14 per dollar The offshore yuan was little changed at 6.8326 per dollar The British pound fell 0.1% to $1.3521 Cryptocurrencies

Bitcoin was little changed at $76,897.42 Ether was little changed at $2,289.74 Bonds

The yield on 10-year Treasuries was little changed at 4.35% Japan’s 10-year yield was unchanged at 2.465% Australia’s 10-year yield advanced five basis points to 5.03% Commodities

Spot gold fell 1.1% to $4,630.32 an ounce West Texas Intermediate crude rose 2.2% to $98.46 a barrel This story was produced with the assistance of Bloomberg Automation.

–With assistance from Toby Alder and Winnie Hsu.

©2026 Bloomberg L.P.