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ADVERTISEMENTEuropean shares showed a slight rise in early trading and oil prices remained high on Wednesday as investors tracked the escalation of the conflict in the Middle East.
US benchmark crude oil was down around 0.43% at $74.52 per barrel, while Brent, the international standard, slipped around 0.52% to $76.05, although both WTI and Brent remain high on the month.
Crude prices rose more than 4% on Tuesday after US President Donald Trump left a Group of Seven summit in Canada early and warned that people in Iran’s capital should evacuate immediately.
Within about eight hours, Trump went from suggesting that a nuclear deal with Iran remained “achievable” to urging Tehran’s 9.5 million residents to flee for their lives. Iran and Israel continued to exchange airstrikes on Wednesday.
The fighting has driven prices for crude oil and gasoline higher because Iran is a major oil exporter and it sits on the narrow Strait of Hormuz, through which much of the world’s crude passes. Past conflicts in the area have caused spikes in oil prices, though they’ve historically proven brief after showing that they did not disrupt the flow of oil.
European stocks, meanwhile, showed faintly positive trends in early trading. The DAX 40 was up around 0.11% at 23,461.41, the CAC 40 rose 0.29% to 7,706.08, the STOXX 600 was broadly flat, while the FTSE 100 rose 0.23% to 8,854.79.
Earlier in the day, Asian stock markets showed a varied picture. Tokyo’s Nikkei 225 jumped 0.78% to 38,837.48.
Hong Kong’s Hang Seng dropped 1.17% to 23,698.65 while the Shanghai Composite Index rose 0.3% to 3,388.77.
The Kospi in Seoul gained 0.54% to 2,966.20 while Australia’s S&P/ASX 200 shed 0.1% to 8,533.10.
On Tuesday, US stocks slumped under the weight of higher oil prices and weaker than expected retail sales in May.
Trump raised the temperature on Israel’s fight with Iran by calling for “Unconditional surrender!” on his social media platform and saying, “We are not going to” kill Iran’s leader, “at least for now”.
The S&P 500 fell 0.84% to 5,982.72 and the Dow Jones Industrial Average dropped 0.7% to 42,215.80. The Nasdaq composite fell 0.91% to 19,521.09.
On early Wednesday morning in the US, S&P futures rose 0.11% to 5,991.50, Dow Jones futures increased less than 1% to 42,245.00, while Nasdaq futures advanced by 0.13% to 21,759.00.
The markets will be looking to the Federal Reserve as it makes a decision on its interest rates today. The nearly unanimous expectation among traders and economists is that the Fed will make no move.
In currency trading early on Wednesday, the US dollar fell 0.2% to 144.94 Japanese yen. The euro edged 0.18% higher, to $1.1502.
