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Wall Street gains as oil trades lower and ends in volatile volatility

Wall Street indexes rose on Wednesday, boosted by a slew of positive corporate earnings. U.S. Yields also increased, but European shares ended flat, ending a two-day streak of gains.

The U.S. president Donald Trump issued a executive order that imposed an additional 25% tariff for goods coming from India. He claimed the country had imported Russian oil.

The oil prices sawsawed up and down as Trump's comments about progress in negotiations with Moscow caused uncertainty over whether the U.S. will impose new sanctions against Russia.

The MSCI index of global stocks rose by 0.65% to 932.

Apple shares rose after the news that it would announce its domestic manufacturing pledge. The Nasdaq Composite was also up 1.21% at 21,169.42.

The Dow Jones Industrial Average increased 0.18% to 42,193.12 while the S&P 500 grew 0.73% to 6345.06.

Earnings have a mixed response. "Earnings are seeing a mixed reaction.

The STOXX 600 Index in Europe closed 0.06% down, with healthcare stocks dragging it down after Trump announced his tariff plan for pharmaceuticals.

The broadest MSCI index of Asia-Pacific stocks outside Japan fell by 0.08%, closing at 654.33, while Japan’s Nikkei gained 0.60%, reaching 40794.86.

Wall Street closed down on Tuesday, after data revealed that the services sector activity had unexpectedly plateaued in July.

The markets increased their bets that the Federal Reserve will cut rates in September after the soft data on Friday.

Samy Chaar is the chief economist of Lombard Odier. He said that there's a tug-of war between the concrete signs we have seen that show the U.S. economic slowdown and the fact that rates are going down, which will remove some pressure on valuations.

The focus of traders has been on the tariff impact.

"The market is focusing more on the fact we're getting moderate tariffs. But I wonder if they aren't paying enough attention to the fact we could still be getting more, like pharmaceuticals," Chaar said.

Trump said on Tuesday that he will announce tariffs on chips and semiconductors in the coming week. The U.S. will initially impose a'small tariff' on pharmaceutical imports, before increasing the tariff substantially over the next year or two.

He said that the U.S. and China were close to a deal on trade, and he planned to meet with his Chinese counterpart Xi Jinping by the end of this year if a deal was reached.

Brazil has submitted a request for consultation at the World Trade Organization regarding U.S. Tariffs.

Treasury yields have gained on the government bond markets. The yield on the benchmark 10-year U.S. notes increased 3.4 basis points from late Tuesday to 4.23%.

The yield on benchmark German 10-year Bunds increased 0.2 basis points from late Wednesday to 2,644%.

FedWatch from the CME shows that Fed funds futures indicate a 94% probability of a rate reduction next month. At least two cuts are priced in this year.

Investors await Trump's choice to fill the upcoming vacancy in the Fed board. Trump announced that a decision would be made shortly, but ruled out Treasury Secretary Scott Bessent, who is currently the chair of the Fed board. His term expires in May 2026.

The euro rose 0.68% to $1.1653.

The dollar index (which measures the greenback in relation to a basket currency) fell by 0.5%, falling to 98.24.

Brent crude futures dropped 75 cents or 1.1% to settle at 66.89 per barrel. U.S. crude fell 81 cents or 1.2% to settle at 64.35.

Spot gold dropped 0.36% to $368.65 per ounce. U.S. Gold Futures were flat at $3433.4.

(source: Reuters)