Oil prices continue climb on US-Iran deal doubts; stocks retreat
NEW YORK/LONDON: Oil prices touched a one-week high on Tuesday and Wall Street finished lower as traders grew more pessimistic about a potential deal to bring stability to the Middle East and reopen the Strait of Hormuz.
Oil prices reached a one-week peak on Tuesday as traders grew more skeptical about a possible deal to stabilize the Middle East and reopen the Strait of Hormuz. The newly appointed secretary of Iran's Supreme National Security Council warned that the Strait of Hormuz would remain sealed until the US altered its approach and complied with Iran's conditions for ending the conflict.
Wall Street ended lower as uncertainty about the global inflation outlook weighed on markets. Gold prices dropped from a two-month high ahead of consumer price data due on Wednesday.
Markets are uncertain about the potential for a detente, although this perspective is mistaken, according to Ron Albahary, chief investment officer at LNW. Wall Street equities lost earlier gains, with MSCI's global stock index falling 0.23 percent. The trade war between the US and Iran has been a focal point amid rising tensions, which pushed oil prices up by 5 percent on Monday.
US President Donald Trump responded to Iran's demands for a deal by proposing his own terms, including compensation for casualties in wars, attacks, and protests, which could hinder efforts to open the crucial waterway.
Brent futures rose by US$1.19, or 1.4 percent, to settle at US$88.91 a barrel, while US crude increased by US$1.07, or 1.3 percent, to US$83.20. Analysts expect the oil market to hover between US$75 and US$95 while awaiting a resolution to the geopolitical conflict. On Wall Street, the Dow Jones Industrial Average declined by 0.34 percent to 53,791.85, the S&P 500 slipped 0.32 percent to 7,728.20, and the Nasdaq Composite dropped 0.60 percent to 26,445.45.
The pan-European STOXX 600 remained flat at 660.51 points, hovering near all-time highs as investors weighed earnings optimism against Middle Eastern geopolitical risks.
Emerging market stocks declined by 0.28 percent to 1,665.44. MSCI's comprehensive Asia-Pacific index outside Japan closed flat at 1,627.53. Inflation data released on Wednesday will not account for the most recent rise in energy costs but could still influence expectations for the Federal Reserve's September meeting. Economists at Capital Economics believe the risks are leaning towards a strong report, which could boost rate expectations and potentially reignite concerns about stagflation. The yield on the benchmark US 10-year note fell 0.35 basis points to 4.695 percent.
The tech-heavy Nasdaq was down about 2 percent from its record high in early June, with Amazon and Alphabet contributing to the decline. Nvidia announced a partnership with six major financial institutions, including BlackRock, Apollo, and Goldman Sachs, to create funding measures worth over US$500 billion for AI infrastructure.
Intel raised US$20 billion through a share sale, marking its first offering since listing in 1971. The yen showed renewed strength, gaining 0.01 percent against the dollar and remaining near last week's peak of 155.20. Currency fluctuations affected the dollar index, which rose by 0.05 percent to 99.82, with the euro slipping by 0.01 percent to US$1.1541.
Gold prices fell by 0.45 percent to US$4,368.61 an ounce, while US gold futures increased by 0.5 percent to US$4,441.10.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.