Global stock index down after data, oil rises after Iran-US strikes
By Sinéad Carew and Tom Wilson
NEW YORK/ LONDON, June 10 (Reuters) – MSCI’s global equities index pared earlier losses on Wednesday after economic data showed U.S. inflation was high but in line with expectations and oil prices rose as Iran and the United States exchanged strikes.
The dollar and U.S. Treasury yields were lower as U.S. consumer inflation rose at its fastest pace since April 2023. The Labor Department’s 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 32% chance rates would stay unchanged by December, according to CME Group’s FedWatch tool.
Steve Kolano, chief investment officer at Integrated Partners, said that the report “doesn’t do anything to reduce the probability of a possible rate hike at some point this year” with energy prices high and the Iran conflict still unresolved.
OIL PRICES RISE AGAIN
Oil prices rose again after U.S. President Donald Trump wrote in a social media post that Iran would “pay the price” after taking too long to negotiate and Tehran said it would reassess its diplomatic engagement with Washington after overnight tit-for-tat strikes.
Iran’s Revolutionary Guards said they had carried out missile and drone attacks on U.S. military bases in Jordan, Kuwait and Bahrain in retaliation for American strikes on Iranian targets around the Strait of Hormuz, an energy conduit where oil transportation has been disrupted since the war began in late February.
The clashes marked one of the biggest outbreaks of hostilities since the two countries agreed to a ceasefire in April.
In energy markets, U.S. crude rose 1.63% to $89.64 a barrel and Brent rose to $92.65 per barrel, up 1.31% on the day.
High oil prices are one of the prime drivers of inflation.
“Just because the inflation numbers came in consistent with expectations doesn’t mean they were good,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management.
“The clock is ticking loudly to get the Strait of Hormuz open, either through force or through a truce. The Fed isn’t going to try to guess when that will happen, so President Trump needs to deliver them certainty before they meet.”
MIXED PERFORMANCE ON WALL STREET
On Wall Street at 10:27 a.m. ET (1427 GMT), the Dow Jones Industrial Average fell 187.91 points, or 0.37%, to 50,684.20, the S&P 500 rose 2.58 points, or 0.03%, to 7,389.23 and the Nasdaq Composite rose 5.46 points, or 0.04%, to 25,689.59.
