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Reuters reported that global equities edged higher on Wednesday even as oil prices retreated amid developments in negotiations that could resolve tensions between the United States and Iran and restore shipping through a critical energy chokepoint. US consumer prices rose just 0.1 percent in July matching forecasts and this outcome reduced pressure on the Federal Reserve to lift rates at its next meeting. The inflation print together with ongoing diplomacy helped support risk appetite across equities while leaving commodity traders cautious.
The latest reading “relieves some of the concerns that the Fed is being pushed toward a rate hike due to inflation which is being fueled by higher energy prices” Robert Pavlik senior portfolio manager at Dakota Wealth in Fairfield Connecticut said. Spot gold climbed in response to the softer inflation backdrop that diminished the case for higher yields. Pavlik noted that the data did not yet incorporate the recent surge in energy costs linked to Middle East tensions according to the Reuters dispatch.
MSCI’s gauge of stocks worldwide rose 0.37 percent to finish at 1,154.92 according to Reuters figures. Wall Street followed suit with the Dow Jones Industrial Average up 0.10 percent at 53,848.98 the S&P 500 gaining 0.31 percent to 7,752.35 and the Nasdaq Composite advancing 0.65 percent to 26,617.60 where upbeat results from AI cloud firm CoreWeave after the prior close provided additional support. European shares ended little changed with the STOXX 600 down 0.04 percent while Asia-Pacific equities outside Japan closed up 0.92 percent and emerging-market stocks rose 1.05 percent.
Iran’s most senior security official stated that the Strait of Hormuz would remain closed unless the US met Tehran’s conditions a remark that kept markets attentive even as separate ship attacks were reported by American and Houthi forces. Investors nonetheless stayed relatively calm amid the fluid situation. “Our base case for a long time has been a gradual but messy de-escalation” Dorian Carrell head of multi-asset income at Schroders said adding that incomplete restoration of traffic would likely put a floor under oil prices and sustain an energy-driven inflationary force in the near term.
Brent crude futures slipped 0.26 percent to $88.68 a barrel and US crude dropped 0.49 percent to $82.79 a barrel pulling back from gains exceeding one dollar the previous session that had marked their highest settlements since July 31 Reuters data showed. Benchmark 10-year US Treasury yields declined 1.81 basis points to 4.666 percent and German 10-year bund yields fell 3.77 basis points to 3.139 percent. The dollar index eased 0.08 percent to 99.73 with the yen little changed near 159 per dollar after suspected intervention earlier in the period.
A weekly inventory report from the Energy Information Administration recorded a surprise 17.4 million barrel increase in US crude stocks to 424.4 million barrels for the week ended August 7 their highest level since early June and the largest weekly build since January 2023. Stocks at the Cushing Oklahoma delivery hub rose by 1.6 million barrels while refinery runs edged up modestly and utilization slipped to 96.2 percent. The larger-than-expected crude build and a smaller gasoline stock draw contributed to extended losses in oil futures according to the report which arrived against a backdrop where Goldman Sachs analysts had projected Brent to trade in an $80-to-$90 range until clearer signals emerge from the US-Iran negotiations.
