US Markets Open Higher Amid Iran War Tensions and Fluctuating Oil Prices
US stock markets saw modest gains on Wednesday, buoyed by strong quarterly earnings from major companies and easing inflation data. The S&P 500 rose 0.2%, marking its fourth gain in five sessions. The Dow Jones Industrial Average increased by 173 points, or 0.3%, while the Nasdaq Composite also climbed 0.3%.
Inflation Eases, Impacting Rate Hike Expectations
Fresh data indicated that US inflation eased further last month, with wholesale inflation slowing to 5.5% in June from 6% in May, contrary to expectations of an increase. A separate report released a day earlier showed consumer inflation was lower than economists had forecast. This softer inflation data has led to reduced expectations for a US Federal Reserve interest rate hike at its next policy meeting. According to CME Group data, traders now see only a 10% chance of a rate increase, down sharply from nearly 42% earlier this week.
Despite the positive market sentiment, investors remained cautious due to ongoing tensions between the United States and Iran, which have raised concerns over global energy supplies. Iran’s Revolutionary Guard warned that energy exports from the Middle East could be disrupted if the US blockade on Iranian oil tankers in the Strait of Hormuz continues. They stated, “The export of oil and gas from the region will be either for everyone or for no one.”
Asian and European Markets React
Asian markets also posted gains, led by technology shares. South Korea’s Kospi index surged 6.2%, driven by strong performances from major technology companies like Samsung Electronics and SK Hynix. In Europe, Dutch chip equipment maker ASML reported stronger-than-expected revenue growth and forecast higher sales, citing continued demand driven by artificial intelligence (AI). This news helped restore investor confidence in AI-related stocks following recent volatility.
In China, Hong Kong’s Hang Seng index gained 1.4%, while Shanghai’s benchmark index slipped 0.3%. This decline followed official data showing that the country’s economy grew at an annual rate of 4.3% in the second quarter, slower than the 5% growth recorded in the previous quarter.
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