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Oil prices rise after Trump's Hormuz levies threat

After yo-yoing between gains and losses, stocks moved back to negative territory as oil reached a?one-month-high on Tuesday following President Donald Trump's announcement that?the?U.S. The United States is re-imposing its blockade of Iranian ships and will collect a 20% charge on Strait of Hormuz freight traffic.

Brent crude futures rose over $3.00, to $86.36 per barrel. This is its highest level since the middle of June.

Investors were frightened by the escalating tensions between the U.S. and Iran. They analyzed quarterly earnings of companies like oil giant BP or telecom equipment maker Ericsson in order to assess how this conflict will affect corporate health.

Travel and leisure, which had been down 2.4% at the time of writing, was responsible for the 0.7% drop in STOXX 600. MSCI's world share index edged in the negative after a volatile Asian trading session. Europe opened lower. The markets were also shaken by the hawkish remarks made on Monday by Federal Reserve Governor Christopher Waller. He said that the U.S. Central Bank may have to raise interest rates in the near future if inflation continues well above its 2% target.

The markets enter Tuesday at a critical inflection point, as investors weigh three competing forces: the beginning of the second quarter earnings season and the June U.S. Inflation data," said Bruno Schneller, managing director at Erlen Capital Management in Zurich.

He added that "these events will likely determine whether or not the recent rally becomes more selective."

The CPI data for the United States will be released later Tuesday. This will be followed by remarks from Fed chair Kevin Warsh who will present to Congress the semi-annual report of monetary policy. This data will influence expectations for the Fed’s next meeting, which takes place on July 28-29. The markets currently expect a rate hike of 25 basis points to be around 40%. The yield on the rate-sensitive U.S. 2 year?Treasury was at 4.29% last, its highest level since February and an increase of 2 basis points for the day. The yield for the U.S. 10 year Treasury increased by 2 basis points to 4.63%.

BOOMER TRADE Chinese stocks surged earlier in trading after export and import data released on Tuesday exceeded economists' expectations. They closed 2.15 percent higher.

South Korean stocks?rose by 0.7%. Taiwanese stocks fell by 1.42%.

In a research note, ING analysts stated that "China's imports and exports have surged to their highest levels since 2021 when the pandemic-affected growth was skewed," as the tech boom supported growth on both sides. Overnight, Wall Street stocks fell. The S&P closed 0.8% lower, and the Nasdaq Composite dropped 1.6%. S&P futures were 0.1% lower during early European trading, while Nasdaq's futures remained 0.3% higher. The U.S. Dollar Index, which measures a basket against six currencies to determine the strength of the "greenback", slipped 0.1% to 101.16. It was trading at its highest levels for the month. Gold rose 0.5% to $4,020.34. The Nikkei closed 0.7% higher in Tokyo after Finance Minister Satsukikatayama stated that Japan could consider changing the strategy of its Government Pension Investment Fund, if the investment climate changed dramatically. Katayama did not provide any further details.

Bitcoin rose 0.6%, to $62,504.79. (Reporting and editing by Kevin Buckland, Stephen Coates and Gregor Stuart Hunter)

(source: Reuters)