Oil edges down, stocks mixed but Mideast war fears elevated
Oil prices slipped Wednesday following the previous day's surge but investors remained on edge fearing a US intervention in the Israel-Iran conflict after Donald Trump called for Tehran's "unconditional surrender".
Iran and Israel exchanged missile strikes for a sixth day, with the US president's latest comments appearing to dent hopes that the crisis in the Middle East could be calmed.
Leaving the G7 summit in Canada a day early on Monday, Trump said he was aiming for a "real end" to the conflict, not just a ceasefire.
He later shared a series of social media posts that stoked speculation he could be planning to join Israel in its strikes on Iranian military and nuclear sites.
Days after a senior US official said Trump had told Israel to back down from plans to assassinate top leader Ayatollah Ali Khamenei, Trump looked to reverse course.
"We know exactly where the so-called 'Supreme Leader' is hiding. He is an easy target, but is safe there -- We are not going to take him out (kill!), at least not for now," he wrote on his Truth Social platform.
Warning Iran against targeting US interests, he also posted: "But we don't want missiles shot at civilians, or American soldiers. Our patience is wearing thin."
And in a later post wrote: "UNCONDITIONAL SURRENDER!"
The comments sent oil prices spiking more than four percent Tuesday on fears an escalation of the conflict could hammer supplies from the crude-rich region.
But while both main contracts slipped Wednesday, investors remain on edge over any negative developments.
Of particular concern is the possibility of Iran shutting off the Strait of Hormuz, through which around an estimated fifth of global oil supply traverses, according to a Commerzbank note.
"Iran is reportedly ready to target US regional bases should Trump greenlight strikes on Iranian nuclear facilities," said Stephen Innes at SPI Asset Management.
"Washington's refuelling jets are already en route, and if Fordow gets hit, expect the Strait of Hormuz to become a maritime minefield, Houthi drones to swarm Red Sea shipping lanes, and every militia from Basra to Damascus to light up American forward outposts."
Equity markets Hong Kong, Singapore, Sydney, Mumbai, Wellington, Manila and Jakarta all sank, though Tokyo, Seoul, Taipei and Bangkok edged up.
London edged up at the open even as data showed UK inflation slowed less than expected in May.
Paris and Frankfurt also rose.
The losses followed a weak day on Wall Street, where a below-forecast reading on US retail sales for May -- dragged by a slowdown in auto sales -- revived fresh worries about the world's top economy. That came as another report showed factory output fell unexpectedly.
Still, they did provide a little hope the Federal Reserve will eventually cut interest rates, with traders betting on two by the end of the year, according to Bloomberg News.
Investors will be keeping track of the bank's latest meeting as it concludes later in the day, with most observers predicting it will stand pat.
However, it is also due to release its rate and economic growth outlook for the rest of the year, which are expected to take account of the impact of Trump's tariff war.
"The Fed would no doubt be cutting again by now if not for the uncertainty regarding tariffs and a recent escalation of tensions in the Middle East," said KPMG senior economist Benjamin Shoesmith.
- Key figures at around 0715 GMT -
West Texas Intermediate: DOWN 0.2 percent at $74.73 per barrel
Brent North Sea Crude: DOWN 0.3 percent at $76.25 per barrel
Tokyo - Nikkei 225: UP 0.9 percent at 38,885.15 (close)
Hong Kong - Hang Seng Index: DOWN 1.2 percent at 23,700.42
Shanghai - Composite: FLAT at 3,388.81 (close)
London - FTSE 100: UP 0.1 percent at 8,845.33
Euro/dollar: UP at $1.1511 from $1.1488 on Tuesday
Pound/dollar: UP at $1.3464 from $1.3425
Dollar/yen: DOWN at 144.90 yen from 145.27 yen
Euro/pound: DOWN at 85.50 pence from 85.54 pence
New York - Dow: DOWN 0.7 percent at 42,215.80 (close)
dan/mtp
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Wall Street Journal
9 minutes ago
- Wall Street Journal
Almost a Third of Eurozone's U.S. Trade Surplus Is Due to U.S. Firms, Says ECB
Almost a third of the eurozone's goods trade surplus with the U.S. is accounted for by sales of products manufactured by the affiliates of American businesses, which also account for most of the eurozone's deficit in the trade in services, the European Central Bank said Friday. In its latest Economic Bulletin, economists at the central bank said that should the activities carried out by those affiliates be moved back to the U.S. in response to higher tariffs or changes to U.S. tax policy, the eurozone economy would be smaller, but the impact on employment and incomes would likely be limited.
USA Today
11 minutes ago
- USA Today
Trump pivots to distractions as polls show collapsing support for his agenda
Trump pivots to distractions as polls show collapsing support for his agenda | Opinion Americans give Trump a failing grade on the budget, trade and immigration. That's tough to swallow for a politician who gauges everything on public perception. Show Caption Hide Caption 'No Kings' protests vastly outdraw Trump's military parade A stark contrast emerged in attendance between the Trump administration's Army birthday parade in Washington, DC, and the sweeping 'No Kings' protests held nationwide. unbranded - Newsworthy Recent polling data indicates that the majority of Americans disapprove of President Trump's budget bill, particularly its cuts to Medicaid. Trump's immigration policies, including increased ICE raids, are facing declining public support. The president's trade policies are also unpopular, with a majority of Americans disapproving of his approach. Trump's overall job approval rating has fallen since he took office, with more Americans disapproving than approving of his performance. Donald Trump's plan for his second term as president has been to run the table quickly to score one quick and big budget victory pushed through on artificial deadlines and whip the vote for Republican support in Congress. Trump paired that objective with two other staples of his reelection campaign – punishing America's allies with illogical trade wars and setting a historical record for the economy-disrupting mass deportation of undocumented immigrants. It's summer now, and the report card has arrived. Americans give Trump a failing grade on the budget, trade and immigration. That's tough to swallow for a politician who gauges everything on public perception. Trump, being Trump, is now pivoting to distractions, touting a military parade that flopped as an expensive boondoggle and then flipping from diplomacy with Iran to potentially ordering air strikes on that country. Take our poll: Should US go to war with Iran or support Israel from afar? | Opinion Americans disapprove of budget bill slashing Medicaid Let's start with Trump's budget, which Republican leaders in Congress call the "one big, beautiful bill" in honor of their continuing deference to whatever he wants and the dereliction of their duty to serve as a coequal branch of our government. The version that narrowly passed the House slashed federal safety net programs to boost tax cuts for the wealthiest Americans. Some senators, seeking to make things even better for the rich at the expense of the poor, want bigger cuts to Medicaid, food stamps and other programs. Opinion: Trump lied about the LA protests so you wouldn't see what he's really doing A batch of recent polls shows Americans reject that: A June 11 Quinnipiac University poll found that 53% of American voters oppose the budget bill, while 27% approve it. Nearly half of the voters polled said funding for Medicaid should go up, not down, while 40% said it should stay the same and just 10% wanted it cut. A June 16 Associated Press-NORC Center for Public Affairs Research poll found that 50% of Americans think we spend too little on Medicaid, while 31% say we spend enough and just 18% say we spend too much. Forty-five percent of Americans think we should spend more on food and nutrition assistance, while 30% say we spend enough and 24% say we spend too much. A June 17 KFF Health Tracking Poll found that 64% of Americans hold an unfavorable view of Trump's budget bill, while 83% of them hold a favorable view of Medicaid. Republican support for the bill came in strong at 61% at first, but then dropped by 20 points when the Republicans polled heard details about how the legislation would force millions off their health care plans. Polling finds Americans disagree with Trump on immigration, economy, border security This much seems clear: The more Americans learn about Trump's One Big Beautiful Bill Act, the more they find it small-minded and ugly. That explains the artificial deadlines. Trump and his Republican allies in Congress want to wrap this up by July 4. But Republican infighting – moderates who fear it goes too far, far-righters who complain it doesn't go far enough – will make for a contentious Congress for at least the next two weeks. While we wait, Trump is seeing his support on immigration – once his strongest issue – melt away in the summer of Immigration and Customs Enforcement raids. The Quinnipiac University poll found 54% of the registered voters surveyed opposed his approach to immigration, while 43% approve and 3% had no opinion. Trump campaigned in 2024 on reviving America's economy. But his trade wars, which have hit our country's international allies just as hard or harder than our geopolitical foes, are unpopular. Quinnipiac found that just 38% approve of Trump's trade policy, while 57% disapprove and 6% had no opinion. The AP-NORC poll found that 32% of Americans think we spend too much on border security, while 37% think we spend the right amount and 29% think we spend too little. Trump's approval rating continues to tank. Does it matter? In this time of divisiveness, a majority of Americans can agree on one thing: Trump is disappointing them as president. Just 38% of the votes surveyed by Quinnipiac approve of Trump's job performance, while 54% disapprove. Opinion: Threats against judges nearly doubled under Trump. Republicans blame the victim. That tracks with a Pew Research Center poll released June 17, which found that 41% of those polled approve of Trump's performance while 58% disapprove. Pew noted that Trump has lost ground in his approval rating since he was sworn into office again on Jan. 20. Don't expect Trump to spend too much time worrying about what Americans tell pollsters. He has a long history of touting polls when they hold good news for him and dismissing them when they don't. He also suggested just before the 2024 election that releasing poll results he didn't like "should be illegal." Here's what you can expect: more distractions from Trump as the Republicans fights it out on which version of his budget bill passes or fails in Congress. If they listened to Americans, they would kill the bill and start from scratch. Follow USA TODAY columnist Chris Brennan on X, formerly known as Twitter: @ByChrisBrennan. Sign up for his weekly newsletter, Translating Politics, here.
Bloomberg
11 minutes ago
- Bloomberg
Currency Traders Are Ditching Dollar for Euro on Options Bets
The euro is taking on a bigger role in the global currency options market as traders skirt around the dollar given the risks from unpredictable US policy and a global trade war. There's been a shift in trading volumes. Around 15% to 30% of contracts tied to the dollar versus major currencies were switched to the euro, looking at data from the Depository Trust & Clearing Corporation for the first five months of this year versus the final five months of 2024. There are also signs the euro is being used as a haven — traditionally the dollar's role — and for bets on big moves.
