Global Markets-Stocks inch up, oil dips as traders eye US-Iran talks

Markets were still following talks to end the war and reopen the Strait of Hormuz to shipping traffic. The U.S. and Yemen's Iran-aligned Houthis reported separate attacks on shipping on Tuesday, while both Iran and the U.S. have stepped up their rhetoric in recent days. Iran's most senior security official said on Tuesday the Strait of Hormuz will remain closed unless the U.S. accepts Iran's conditions. Still, investors have been calm. "Our base case for a long time has been a gradual but messy de-escalation," said Dorian Carrell, head of multi-asset income at Schroders. "We don't expect traffic (through the Strait of Hormuz) to go to its full capacity. We think that puts a floor on the oil price and maintains an energy-driven inflationary driver in markets in the near- to medium-term." Brent crude futures LCOc1 fell 0.26% to $88.68 per barrel, and U.S. crude CLc1 fell 0.49% to $82.79. Both benchmarks settled more than $1 higher on Tuesday, marking their highest closes since July 31. The yield on benchmark U.S. 10-year notes US10YT=RR fell 1.81 basis points to 4.666% and the yield on the benchmark German 10-year Bunds DE10YT=RR fell 3.77 basis points to 3.139%. Markets are increasingly pricing in an early rate hike in Japan, putting pressure on the nation's shorter-dated bonds. Investors price in an almost 60% chance of a quarter-point hike at the Bank of Japan's September meeting. The yen JPY= strengthened 0.11% to 159.08 per dollar, remaining off last week's high of 155.20 after several suspected rounds of intervention. The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.08% to 99.73, with the euro EUR= up 0.1% at $1.1552. Spot gold XAU= rose 1.61% to $4,436.99 an ounce. U.S. consumer prices increased 0.1% in July, in line with expectations, data showed on Wednesday. The small increase could weaken the argument for an interest rate increase from the Federal Reserve next month. Money markets have shown a roughly 50% chance of a hike 0#USDIRPR heading into the data release. The data "relieves some of the concerns that the Fed is being pushed toward a rate hike due to inflation, which is being fueled by higher energy prices," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. Gold prices rose more than 1% as the data dented rate hike bets. GOL/ The data did not capture the most recent rise in oil prices LCOc1, which have hurtled higher amid tensions over the U.S. and Iran. MSCI's gauge of stocks across the globe .MIWD00000PUS rose 0.37% to 1,154.92. On Wall Street, the Dow Jones Industrial Average .DJI rose 0.10% to 53,848.98, the S&P 500 .SPX added 0.31% to 7,752.35 and the Nasdaq Composite .IXIC traded up 0.65% at 26,617.60. Upbeat results from AI cloud company CoreWeave CRWV.O after the market closed on Tuesday gave the AI trade another boost. In Europe, the pan-continental STOXX 600 .STOXX fell 0.04% while Europe's broad FTSEurofirst 300 index .FTEU3 lost 0.09%. In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan .MISX00000PUS closed higher by 0.92% at 1,636.51. Emerging market stocks .MSCIEF rose 1.05% to 1,682.95. Global equities were higher on Wednesday and oil prices dipped as traders eyed talks to end the [Iran war](https://www.reuters.com/world/iran/) and U.S. data showing only a slight rise in inflation damped some expectations for a Federal Reserve rate hike. Talks between the U.S. and Iran were deadlocked. The United States and Yemen's Iran-aligned Houthis reported separate ship attacks. But oil prices dipped as investors weighed lower demand forecasts.

Global Markets-Stocks inch up, oil dips as traders eye US-Iran talks

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