Oil price drops, shares jump as Trump announces Israel-Iran ceasefire
Iran's foreign minister denied that an official ceasefire agreement had been reached, but noted that Tehran would not continue its attacks as long as Israel halted its 'aggression'. At the time of writing, Israel had yet to comment.
The truce, which Trump is labelling the end of the '12-day war', came after Iran attacked a US base in Qatar on Monday, retaliating against the US bombing of its nuclear sites over the weekend.
In response to Tuesday's development, oil prices dropped as fears over a blockage to the Strait of Hormuz subsided.
About 20% of global oil and gas flows through this narrow shipping lane in the Gulf.
Brent crude, the international standard, dropped 3.83% to $68.74, while WTI dropped 3.85% to $65.87.
Last week, Brent reached over $78 a barrel, a level not seen since the start of this year.
Related
Why the Strait of Hormuz remains critical for the global economy
The dollar sees a rebound after US strikes Iran, but can it continue?
European markets opened in the green. The DAX was 1.99% higher at 23,730.98, the CAC 40 was up 1.71% at 7,666.69, while the FTSE 100 rose 0.81% to 8,828.83 in morning trading.
The STOXX 600 increased 1.48% to 542.93, while the EURO STOXX 50 rose 1.9% to 5,320.97.
Looking to the US, S&P 500 futures rose 0.97% to 6,135.75 on Monday, while Dow Jones futures increased 0.89% to 43,284.00.
Australia's S&P/ASX 200 jumped 0.89% to 8,550.10, South Korea's Kospi rose 2.75% to 3,097.28, and the Shanghai Composite index climbed 1.07% to 3,417.89.
Hong Kong's Hang Seng rose 2% to 24,162.70 and the Nikkei 225 increased 1.16% to 38,796.39.
The US Dollar Index slipped by 0.32% to 98.10. The euro gained 0.25% against the dollar while the yen dropped 0.48% in comparison to the greenback.
Economists had suggested that persistent threats to oil would increase the value of the US dollar and hurt other currencies such as the euro, notably as the US economy is more energy independent.
Greg Hirt, chief investment officer with Allianz Global Investors, told Euronews earlier this week that although the dollar may see a short lift on the Iran-Israel conflict, 'structural issues around a twin deficit and the Trump administration's volatile handling of tariffs should continue to weigh on an overvalued US dollar'.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Los Angeles Times
13 minutes ago
- Los Angeles Times
Trump's unusual deal with Nvidia and AMD sparks concerns, legal questions
President Trump struck an unusual deal with Nvidia and Advanced Micro Devices that allows the companies to sell certain chips to China in exchange for giving the U.S. government a 15% cut of those sales. But the unprecedented agreement also has raised concerns from politicians and legal experts over whether the deal is legal and would pose a national security threat. Questions also linger about exactly how the deal, which was announced Monday, would work because the U.S. Constitution bars taxes on exports, although some experts said Trump could find a workaround. The U.S. government might receive $3 billion from the revenue split if China's demand for Nvidia's H20 chip — which is less powerful than the company's highest-end artificial intelligence chip — reaches $20 billion, according to a note from Bernstein Research. 'It ties the fate of this chip manufacturer in a very particular way to this administration that is quite rare,' said Julia Powles, a professor and executive director of the UCLA Institute for Technology, Law & Policy. Trump's agreement with the world's most valuable company could put pressure on other tech companies and major exporters to strike similar deals with the U.S. government, but it's still unclear what the implications will be internationally, she said. The deal is the latest example of how tech companies are seeking to curry favor with the Trump administration, which has threatened to impose tariffs on semiconductor companies that don't commit to investing in the United States. Apple faced potential tariffs as well, but committed to investing $100 billion more in U.S. manufacturing after Trump criticized the company for expanding iPhone production in India. Trump also placed restrictions in April around the export of certain AI chips, including Nvidia's H20 and AMD's MI308, over national security concerns. He's called for the resignation of Intel Chief Executive Lip-Bu Tan, who has faced scrutiny over his reported investments in Chinese companies, but changed his tune after meeting the executive this week. Democratic and Republican lawmakers have criticized the idea that tech companies should split their sales with the U.S. government in exchange for export licenses that allow them to resume chip sales in China. 'Export controls are a frontline defense in protecting our national security, and we should not set a precedent that incentivizes the Government to grant licenses to sell China technology that will enhance its AI capabilities,' Rep. John Moolenaar (R-Mich.), the chair of the House Select Committee on China, said in a statement. Rep. Raja Krishnamoorthi, (D-Ill.), a ranking member of that committee, said in a statement that the deal raises questions about its legality and how the funds will be used. 'The administration cannot simultaneously treat semiconductor exports as both a national security threat and a revenue opportunity,' he said. 'By putting a price on our security concerns, we signal to China and our allies that American national security principles are negotiable for the right fee.' The White House didn't answer questions about the agreement. White House Press Secretary Karoline Leavitt told reporters Tuesday that 'the legality of it, the mechanics of it, is still being ironed out by the Department of Commerce.' On Monday, Trump defended the deal with Nvidia, stating that the H20 chips are 'obsolete' and less powerful than the company's more high-end Blackwell chip. At a news conference, Trump said he met with Nvidia CEO Jensen Huang and initially asked for a 20% revenue split but they came down to 15%. 'We negotiate a little deal,' Trump said. 'So he's selling a essentially old chip.' Trump's remarks came after a report from the Financial Times over the weekend that Nvidia and AMD would pay 15% of their China chip revenue to the U.S. government. AMD didn't respond to a request for comment. An Nvidia spokesperson said in a statement that the company hasn't shipped H20 chips to China for months but it hopes that easing export restrictions will 'let America compete in China and worldwide.' 'America cannot repeat 5G and lose telecommunication leadership. America's AI tech stack can be the world's standard if we race.' For Nvidia, the stakes are high. Huang said in a May interview with Stratechery, a newsletter and podcast, that the Chinese market is about $50 billion a year. Restricting H20 chip sales means that the company is walking away from profits that could be used to compete with China in the race to dominate AI. Taylar Rajic, an associate fellow at the Center for Strategic and International Studies, said she's skeptical that legal concerns would halt the arrangement because it's unclear who would sue. 'I can't identify who would bring that suit forward,' she said. 'It wouldn't be Nvidia because they're the ones who negotiated this deal.' Meanwhile, Chinese officials have their own fears that Nvidia's chips could have location tracking or remote shutdown capabilities, though the company has denied those accusations. 'China obviously has its own concerns and its own national security considerations that it wants to take into account,' Rajic said. 'It just depends on whether or not they want to buy it from us too.'
Axios
34 minutes ago
- Axios
How Biden-era antitrust decisions are driving dealmaking
President Trump prides himself on being a dealmaker, but some eye-popping dealmaking of late comes thanks to his predecessor's administration. Why it matters: The Biden administration's antitrust crackdown, at the time sharply criticized by many in Silicon Valley, has now spawned a few interesting deal scenarios in tech. Driving the news: Biden-era antitrust appears to be helping fuel an audacious bid by AI startup Perplexity to acquire Google's Chrome browser for $34.5 billion, Axios' Dan Primack notes, confirming a scoop by The Wall Street Journal earlier Tuesday. The Biden Justice Department had proposed that Google be forced to sell Chrome after the company was found to have illegally abused its search monopoly. A federal judge is now considering that remedy, and Perplexity could be trying to indicate that there would be a buyer in that instance, the Journal said. Bidders with fatter wallets than Perplexity, including OpenAI, could emerge if Google is forced to sell. Google has said it will appeal the monopoly ruling. Case in point: For more signs of the Biden antitrust effect, look no further than the recent initial public offering of Figma. Its stock is up some 160% from its offering price of $33. The July 31 IPO was made possible after antitrust objections derailed a previously planned takeover by rival software design giant Adobe in 2023. The Figma IPO prompted former Federal Trade Commission chair Lina Khan to take a victory lap on social media, writing that Figma's market debut was "a great reminder that letting startups grow into independently successful businesses, rather than be bought up by existing giants, can generate enormous value." That said, it was the Justice Department's antitrust division, not the FTC, that examined the Figma-Adobe deal. Yes, but: The Biden administration's tough stance on mergers has not, with the benefit of hindsight, helped Spirit Airlines, which had sought to be acquired by JetBlue. That deal was blocked last year, and Spirit ended up in Chapter 11 bankruptcy, emerging from it just this past March. What we're watching: The Trump administration's approach to antitrust so far does not appear to differ significantly from the Biden administration's.
Yahoo
41 minutes ago
- Yahoo
Some good inflation news: Car insurance is falling back in line
Economists are busy hunting for signs of tariff-induced price hikes in the monthly inflation data. They may be overlooking some good news, which is that a surge in the cost of car insurance is finally abating. The cost of owning a car has soared during the last few years, with drivers absorbing hits from all angles. The average cost of a new car is now $49,000, and Trump's tariffs will likely push that well above $50,000. As new cars get costlier, so do used cars. Fancy new technology and other factors, meanwhile, have raised the cost of parts, repairs, and maintenance. But the biggest jump has been in the cost of insurance, up 60% during the last five years, to an average monthly premium of about $213. A bill that was once an afterthought now totals nearly $3,000 per year, and a lot more for some vehicles and drivers. Read more: The cheapest car insurance in the US in 2025 Relief is on the horizon. In April 2024, the annual rate of car inflation peaked at 23%. It's now at a much tamer 5.3%, and the lower annual price hikes are likely to stick. Insurance is different from most other products and services people buy. Drivers buy insurance only once or twice per year, with the monthly premium set for the duration of the policy. Insurers set premiums based on car-pricing data that also has a lag. They must also deal with regulators who may resist premium hikes that are too steep. The recent surge in car insurance premiums dates to the first days of the COVID pandemic in 2020. Supply chain disruptions, such as a lack of semiconductors, sent new car prices higher, with used car prices soaring as buyers priced out of the new market shopped used. That means the replacement cost of a vehicle totaled in a wreck went way up. All the digital technology on new cars, such as cameras, sensors, and processors, raises the cost of repairs, as well. At the same time, global warming is causing more severe weather that leaves more cars destroyed in floods and storms. And for reasons researchers don't fully understand, crashes have been getting more of those factors push insurers' costs higher, with the industry as a whole enduring several years of net underwriting losses on autos. So insurers have been raising their own prices to get back in the black. That simply takes time, since they can only change their prices once or twice per year. And in some cases, regulators force them to spread premium hikes over several years to spare consumers too much pain all at once. After big jumps from 2021 to 2023, prices for cars and car parts have been relatively stable. Insurance prices flattening out too suggests most insurers have raised premiums by the amount they consider necessary. Insurers can try to price gouge and push rates needlessly high, but it's pretty easy for most consumers to switch carriers, which helps keep premiums in check. Trump's tariffs could reverse the improving trend. They'll make parts more expensive, for example, raising repair bills that insurers will have to foot. That will ultimately trickle down to policyholders through higher rates. But that may be around the next bend, not quite coming into view yet. Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman. Click here for political news related to business and money policies that will shape tomorrow's stock prices. Sign in to access your portfolio
