LONDON: MSCI\u2019s global equities index fell 1.5% on Thursday after economic data showed US inflation was high but in line with expectations and oil prices rose as hopes for Middle East peace progress dwindled after Iran and the United States exchanged strikes and threats. Oil prices extended gains after US President Donald Trump threatened that the United States would attack Iran \u201cvery hard\u201d if no peace deal is finalized. Earlier, Trump wrote in a social media post that Iran would \u201cpay the price\u201d after taking too long to negotiate. After Fox News reported that Trump is considering ordering new strikes on Iran\u2019s power plants and bridges, Iran\u2019s president said that such threats were a sign of desperation rather than a show of strength. Also, US Energy Secretary Chris Wright told a congressional hearing on Wednesday that he\u2019s not aware that the US has taken millions of barrels of oil out of Iran after Trump told reporters it had. As the Iran war uncertainty drove up oil prices, in turn a selloff in equities deepened along with a continued unwinding of the AI trade, according to Michael O\u2019Rourke, chief market strategist at JonesTrading in Stamford, Connecticut. US crude CLc1 settled up about 2.1% at $90.03 a barrel while Brent LCOc1 settled at $93.10 per barrel, up 1.8%. \u201cOil prices have shifted from anxiety to apathy and back again amid renewed skirmishes between the US and Iran,\u201d Phil Flynn, senior market analyst at The Price Futures Group, said. Investor reactions were more modest earlier in the day after an economic release showed U.S. consumer inflation rose last month at its fastest pace since April 2023. DNA
\nThe Labor Department\u2019s Bureau of Labor Statistics reported a 4.2% increase in the Consumer Price Index in the 12 months through May. Traders maintained bets that the Federal Reserve would hold rates steady after its June 17 meeting and priced in a nearly 43% probability of a 25-basis-point hike versus a less than 32% chance rates would stay unchanged by December, according to CME Group\u2019s FedWatch tool.
\nSteve Kolano, chief investment officer at Integrated Partners, said that the report \u201cdoesn\u2019t do anything to reduce the probability of a possible rate hike at some point this year\u201d with energy prices high and the Iran conflict still unresolved. Elevated inflation highlights the need for a resolution in Iran so that oil and liquefied natural gas shipments can resume through the Strait of Hormuz, said Brian Jacobsen, chief economic strategist at Annex Wealth Management.
\n\u201cThe clock is ticking loudly to get the Strait of Hormuz open, either through force or through a truce. The Fed isn\u2019t going to try to guess when that will happen, so President Trump needs to deliver them certainty before they meet,\u201d Jacobsen said.<\/p>\n","protected":false},"excerpt":{"rendered":"
LONDON: MSCI\u2019s global equities index fell 1.5% on Thursday after economic data showed US inflation was high but in line with expectations and oil prices rose as hopes for Middle East peace progress dwindled after Iran and the United States exchanged strikes and threats. Oil prices extended gains after US President Donald Trump threatened that […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-550812","post","type-post","status-publish","format-standard","category-business"],"yoast_head":"\n