Oil price shoots up as stocks tread water

Oil prices surged on Thursday as concerns over a potential ban on US and Israeli vessels using the Strait of Hormuz unsettled markets. Brent crude gained nearly four percent, while the US contract WTI rose nearly three percent. John Kilduff of Again Capital attributed the market's cautious response to the uncertainty surrounding the Strait.

The ensuing drop in US equity markets, including the Dow retreating from a record close and the Nasdaq ending flat, suggested that optimism about oil prices was tempered. US investors were also eagerly awaiting Friday's employment data. European indices displayed mixed results, with London's FTSE 100 declining slightly while Frankfurt and Paris rose modestly.

Despite the decline, oil prices remained significantly lower than they were a week earlier, which provided a positive catalyst as the second week of August approached. Diageo, an alcohol giant, led London's FTSE 100 with a seven percent gain after unveiling a cost-cutting plan. German industrial giant Siemens saw its shares fall five percent before recovering most of the loss, as profit forecasts fell short of expectations.

Tech-heavy indices suffered amid concerns over AI investments, with SanDisk and Western Digital reporting disappointing earnings. In Asia, South Korean tech firms SK hynix and Samsung Electronics both fell over six percent, while Tokyo's Nikkei dropped nearly one percent. Hong Kong, Wellington, Manila, and Taipei also experienced declines, while Shanghai, Sydney, and Singapore showed gains.