RFA Breakfast Paper - June 4, 2026

Brent Holds Near $95 as Diplomatic Hopes Weigh on Oil Prices

Brent crude futures traded near $95 per barrel on Friday, stabilizing after a nearly 3% decline in the previous session, as investors weighed the possibility of a diplomatic breakthrough between the United States and Iran that could eventually reopen the Strait of Hormuz. Market sentiment was supported by reports that Donald Trump remains reluctant to become involved in a full-scale conflict with Iran despite recent tensions and would only consider ending the current truce if American troops were targeted. Nevertheless, the benchmark remains more than 4% higher for the week, reflecting the fact that negotiations have yet to produce meaningful progress and supply risks remain elevated. Additional geopolitical uncertainty stems from the ongoing conflict involving Hezbollah and Israel. Hezbollah reportedly rejected a US-backed ceasefire proposal, although Trump indicated that the group had approached the White House regarding potential steps to end hostilities. Overall, oil markets remain caught between two opposing forces: expectations that a diplomatic agreement could restore energy flows through Hormuz and ease supply concerns, and the continued risk that stalled negotiations or broader regional conflict could tighten global crude supplies once again.

U.S. Sector Rotation Supports Broader Market Despite Weakness in Technology

U.S. equity markets finished mixed on Thursday as investors rotated into healthcare, financials, and communication services stocks while taking profits in parts of the technology sector. The Dow Jones Industrial Average advanced to a fresh record high, while the S&P 500 posted modest gains. However, weakness in semiconductor and AI-related stocks weighed on the Nasdaq Composite, which slipped 0.09% for the session. The broader market continued to show improving breadth, suggesting investor interest is expanding beyond the technology sector that has led much of this year's rally. Meanwhile, Treasury yields moved lower, with the benchmark 10-year U.S. Treasury yield easing to 4.48%, providing support for equities and helping ease pressure on valuations. In commodity markets, WTI crude oil prices retreated amid cautious optimism surrounding U.S.-Iran diplomatic talks, which could reduce geopolitical risks and ease concerns about global oil supply disruptions. Overall, the session reflected a healthy rotation within the market rather than a broad risk-off move, as investors shifted toward financials, healthcare, and communication services while reassessing valuations across high-growth technology and AI-related stocks.

NGX Extends Losing Streak as Persistent Selling Pressure Weighs on Market Sentiment

The Nigerian equity market closed lower for the fourth consecutive trading session as sustained profit-taking activities continued to pressure investor sentiment. The downturn was largely driven by losses in selected medium and large-cap stocks, particularly within the Oil & Gas sector, which recorded the steepest decline among the major sectors. As a result, the NGX All-Share Index (ASI) shed 905.30 points, or 0.37%, to close at 242,227.31, while market capitalization declined by ₦580.65 billion to settle at ₦155.36 trillion. The bearish sentiment persisted across the broader market, reflecting investors’ cautious positioning amid ongoing selloffs. Market breadth also remained weak, with three of the five major sectors ending the session in negative territory. Trading activity slowed considerably compared to the previous session, as both participation and transaction values weakened. Total volume traded declined by 36.24% to 588.46 million units, while the value of transactions fell by 34.05% to ₦27.88 billion across 57,352 deals. Sector performance was mixed, although declines outweighed gains. The Oil & Gas sector led losses with a 4.90% drop, followed by the Insurance sector (-0.58%) and Consumer Goods sector (-0.03%). On the positive side, the Industrial Goods and Banking sectors posted gains of 0.56% and 0.31% respectively, providing limited support to the broader market. The continued weakness in market performance suggests investors remain focused on locking in gains and reducing exposure to risk assets, while selective buying interest in banking and industrial stocks indicates that pockets of resilience remain despite the prevailing bearish sentiment.