Stocks inch up, oil dips as traders eye US-Iran talks

Global equities experienced a slight increase on Wednesday as mild inflation data bolstered expectations that the Federal Reserve would maintain interest rates. Oil prices also rose marginally, as investors weighed the impact of lower demand against the ongoing deadlock in U.S.-Iran talks. Meanwhile, U.S. consumer prices rose by 0.1% in July, in line with forecasts, potentially dampening the argument for a rate increase from the Federal Reserve next month.

The small gain in inflation data alleviated some concerns about the Fed pushing for a rate hike due to rising energy prices. Gold prices hit their highest level in over two months, as the data weakened speculation of an interest rate hike. Markets were still monitoring the talks aimed at ending the Iran war and reopening the Strait of Hormuz to shipping traffic.

The U.S. and Iran-aligned Houthis reported separate attacks on shipping on Tuesday, while both Iran and the U.S. have ramped up rhetoric recently. Iran's senior security official stated that the Strait of Hormuz would remain closed unless the U.S. accepted Iran's conditions. Despite the tensions, investors have remained calm, with the base case for a long time being a gradual but messy de-escalation.