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Oil prices drop as stocks are hit by the Fed's rate reality check
Investors expect the Federal Reserve will take more aggressive measures to combat inflation even after a 16% decline in oil prices this month. STOXX 600 dropped 1.2% under pressure of 'declines by?European chip-equipment manufacturers, following declines in tech shares in Japan and South Korea. Seoul's KOSPI Index fell 10%, its biggest one-day drop since March. Futures on Nasdaq are down over 2.5%. This suggests that Monday's 1.3% decline could continue into the second day. SpaceX shares fell by nearly 17% on Monday after the company tapped the bond markets following its blockbuster IPO earlier this month. Alphabet, Meta Platforms, and Microsoft all also suffered losses. S&P 500 futures fell 1.5%. Chris Weston, research director at Pepperstone Group in Melbourne, said: "These markets are anything but dull." "The former generals in the market seem to have lost their momentum. Investors are now moving into areas that are more defensive and less AI-focused, with more predictable cash flow. Brent crude futures fell below $76 per barrel on Tuesday for the first since early March, as vessels continued to transit the Strait of Hormuz and oil prices were almost back at pre-war levels. Normally, a drop in oil prices would boost stocks, but now investors are focused on what the rise in energy costs will mean for the Federal Reserve and central bank policies. Kevin Warsh, the new chair of the Federal Reserve, is expected to be much more aggressive in his approach to inflation. The 2-year Treasury yields - which are most sensitive to changes in inflation expectations and interest rates - have risen to their highest level in 16 months, trading at 4.188%. Longer-dated yields also rose sharply. "The adjustment in U.S. Yields creates a more difficult backdrop for risk assets?near-term after strong gains made in recent months," MUFG Currency Strategist Lee Hardman said. Investors are almost ready to price in a rate hike by September, according to the money markets. In this context, the dollar has reached a one-year high against a basket of currencies. The Japanese yen has suffered a lot from this strength. On Tuesday, it was flat at 161.47 against the dollar after a volatile session on Monday. Satsuki Katayama, the Japanese Finance Minister, said that she met with U.S. Treasury Sec. Scott Bessent online a day before to discuss global financial markets. Analysts said this indicated an increased risk of Tokyo intervening in order to prop up the yen. On the 10th anniversary since the Brexit vote, which saw Britain leave the European Union and the euro, the pound is down 0.3% at $1.3215. Sterling fell on Monday after British Prime Minister Keir starmer announced he would "resign", paving the path for what will be an orderly transfer to Andy Burnham. Gold fell 2%, to $4,100 per ounce, as expectations of rate increases in the U.S. this year increased. Bitcoin fell by 3.1%, to just below $63,000. Ether dropped almost 5%, to $1,650. (Reporting from Singapore by Gregor Stuart Hunter; Additional reporting in Tokyo by Rocky Swift; Editing by Jacqueline Wong Jamie Freed Thomas Derpinghaus
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Copper falls due to fears of US rate hikes and a strong dollar
The price of copper fell on Tuesday due to concerns about potential 'growth headwinds' from anticipated Federal Reserve interest rate increases as?well? as a stronger U.S. dollar. dollar. Benchmark three-month?copper?on the London Metal Exchange?was down 1.36% to $13,463 per metric ton at 0701 GMT. The Shanghai Futures Exchange's most traded copper contract fell 1.07% to 103,580 Yuan ($15,277.29) per ton. Many banks predict that the Fed will increase interest rates in this year because of persistent inflation and the hawkish attitude of new chair Kevin Warsh. A higher rate?can dampen the outlook for industrial metals that are growth-sensitive by increasing borrowing costs, and stifling economy activity. A stronger ?U.S. Copper was also affected by a stronger dollar. A rise in the dollar makes greenback-denominated commodities more expensive for buyers using ?other currencies. National Bureau of Statistics data showed that the refined copper production in China increased 2.2% on an annual basis to 1.26 million tons. This added to the pressure. Aluminum prices fell 3.54% and 2.23% respectively on the LME, as traders weighed up the supply from the Gulf against the stronger output of China and the rising Chinese exports. The Iran war disrupted shipments across the Strait of Hormuz, and has cut Gulf production to levels well below those pre-war. IAI data show that global primary aluminum output increased 3.5% on a month-to-month basis to 6.2 millions tons in May, largely due to stronger Chinese production. China's exports?of?aluminium wire, which is increasingly used to ship aluminium overseas because it has a tax advantage over unwrought material, tripled in April to reach 50,224 tonnes. "However the?aluminium markets is expected to remain deficit this year," ING analyst wrote in a report. Zinc fell?2.16% among?other LME Metals. Lead lost 1.04%. Nickel dropped 2.25%. Tin dropped 3.87%. On the SHFE, lead fell 0.15%, tin dropped 4,1%, and nickel dropped 1.68 %.
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Gold drops over 2%, dollar remains firm in expectation of Fed rate hikes
The gold price fell by more than 2% on Monday, as a result of a stronger U.S. Dollar and expectations that the Federal Reserve will raise interest rates this year. Investors also assessed U.S. - Iran peace talks. Globally, stocks fell amid worries about AI-related valuations of shares and the threat of higher interest rates. The dollar was near an all-time high while crude fell by 1%, making gold more expensive for buyers holding other currencies. As of 0753 GMT, spot gold was down by 2.2%, at $4,099.84 an ounce. U.S. gold futures for August delivered fell 2% to $4117.70. Spot silver fell 5%, to $61,90 an ounce. Platinum lost 3%, to $1,628.55, and palladium dropped 2.9%, to $1,229.28. Tim Waterer, KCM Trade's chief market analyst, said that while gold had benefited from lower oil prices, it was not able to do the same for the U.S. Dollar, which is continuing to rise on expectations of Fed rate increases. According to the CME FedWatch Tool (a tool that helps traders price in the hawkish monetary policies of the new Fed Chair Kevin Warsh), there is now an 88% probability of a rate increase in December. This was up from 61% prior to the Fed meeting held last week. Chicago Fed President Austan Goolsbee stated that with the labor market stable, his focus is on determining whether the too-high level of inflation will remain the same or decline, as the effects from 'high tariffs' fade and if there is a resolution to the Middle East conflict. The United States has?waived sanctions on Iran for 60 days after the first talks under a nascent peace deal. The?U.S. has?waived its sanctions against Iran for 60-days after the first talks in a fledgling peace deal. Officials reported that the fighting in Lebanon had ceased under the agreement designed to end?hostilities throughout the region. JD Vance, the U.S. vice president, said that talks with Iranian officials had laid a "good foundation" for a final deal. Iran however denied having begun discussions about its nuclear program. Investors await U.S. The Fed's preferred measure of inflation, Personal Consumption Spending, is due Thursday. This data will provide further clues about monetary policy. (Reporting and editing by Subhranshu sahu in Bengaluru, and Mrigank dhaniwala.)
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UN Chief calls on AI companies to be transparent about environmental costs
On Tuesday, the United Nations urged major artificial intelligence companies to disclose their full environmental costs and use renewable energy in their data centres. He also launched a transparency project for the sector. Environmental groups have criticized the rapid growth of data centres to fuel AI for their excessive energy and water use and lack of transparency. In a speech at London Climate Action Week, U.N. Secretary General Antonio Guterres stated that by 2030 they could use enough power to satisfy the basic needs for all 1.3 billion sub-Saharan Africans for an entire year. As he launched the U.N. AI Environmental Transparency Initiative, he called on AI companies to measure and?disclose? their water, carbon and lands use impacts as well as commit to powering data centres with'renewable energy' by 2030. He said that if AI is going to be a part of building a better world, it has to be open about the costs it incurs now. AI firms currently rely on voluntary net zero commitments and targets for renewable electricity to decarbonise operations. Many are also turning towards gas or touting the nuclear power source as a new energy?source. Guterres stated that the world is still not on track to reach global climate goals, and criticized voices who call for increased fossil fuel use. He said that deploying more renewable power projects to electrify buildings, transport and industry was one of the fastest ways to reduce emissions and stop relying on imported fossil fuels. CALL FOR ACTION ON METHANE Guterres launched an action call on methane emission, which included asking fossil-fuel companies to fix any leaks and stop flaring routinely. He said that methane, a powerful greenhouse gas, is responsible for around a third of the current global warming. Guterres announced that he will convene world leaders ahead of the U.N. Climate Conference (COP31) in Turkey will help to drive forward a just transition away from fossil-fuels. (Reporting by Susanna Twidale, Editing by Raju Gopikrishnan).
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Iron ore reaches multi-month lows due to rising supply and tepid China Demand
Iron ore fell to a'multi-month-low on Tuesday. This was due to the prospect of 'increased shipments by major suppliers as we approach the end of the second quarter, and the seasonally low slackening'steel demand. Iron ore, the most traded contract at China's Dalian Commodity Exchange ended daytime trading 0.54% lower than its previous closing price of 738.5 Yuan ($108.91). It reached its lowest level since July 9, 2025 at 734 Yuan during the session. By 815 GMT the benchmark July iron ore price on the Singapore Exchange had fallen 0.7% to $97.55 per ton. This was its lowest level since February 25. For a fourth consecutive session, the contract has been trading well below an important psychological level of $100. The miners will be increasing their shipments to meet the?guidance target this month. Analysts said that this coincides with a seasonally lower Chinese demand. This could lead to a 'pile-up' of portside inventories, which will put pressure on the price of steelmaking ingredients. Analysts at broker Maike Futures also said that the macroeconomic data from China was not encouraging, especially the retail sales which dropped for the first time since over three years. They expect the steel consumption to be affected, they added. Energy prices and freight rates have also fallen due to progress in the peace talks between the United States of America and Iran. Iron ore prices were resilient despite a lacklustre demand, due to rising?freight costs and input costs triggered by energy price spikes caused by the Middle East conflict. On gloomy demand outlooks, coking coal and other steelmaking components have extended their declines, falling by 1.85% and -4.13% respectively. The benchmarks for steel on the 'Shanghai Futures Exchange' were generally weaker. Rebar fell 0.35%; hot-rolled coils dropped 0.27%; wire rods lost 0.47%; and stainless steel dropped 1.49%.
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Asia shares and oil fall as markets revalue Fed expectations
The U.S. lifted sanctions against Iran on Tuesday, and Asian stocks and oil prices dropped. Traders were also concerned about the rising expectation that 'the Federal Reserve could take more aggressive actions?to combat inflation later this year. S&P 500 futures fell 0.9% while MSCI's broadest Asia-Pacific index outside Japan dropped 2.9%. Brent crude fell 1.22% to $76.25 per barrel. The Nikkei index in Japan fell 3% while the Kospi index in South Korea plunged 8.1%. Chris Weston, research director at Pepperstone Group Melbourne, said: "These markets are anything but dull." "The former generals in the market seem to have lost momentum and investors are now rotating into other parts of the market which are more defensive, are less AI-focused, and offer'more predictable cash flow. Early European trades showed the Euro Stoxx futures down 0.96%. German DAX Futures dropped 1% and FTSE Futures were?down 0.95%. Wall Street stocks fell overnight. The S&P 500 was down 0.4%, and the Nasdaq Composite dropped 1.3%. Megacap technology?stocks such as Alphabet, and SpaceX were the main culprits. Oil prices fell more than 3% after U.S. Vice President JDVance announced that progress had been made with Iran in the talks and that the Strait of Hormuz is open. The Yen is nearing a 40-year low The yen is flat against the US dollar, at 161.665, and has been nearing its lowest levels in over 40 years, after an overnight volatile session in the U.S. Satsuki Katayama, Japan's Finance minister, said that she met with U.S. Treasury secretary Scott Bessent online a day earlier to discuss the global financial markets. Concerns are growing over currency fluctuations. The British pound fell 0.1% to $1.3232 after British Prime Minister Keir starmer announced on Monday that he would be resigning. This will pave the way for what is expected to a smooth transfer of power from Andy Burnham, who has been leading in the polls. The U.S. dollar index, which measures the strength of the greenback against a basket six currencies, rose by 0.07%, to 101.08, near its highest level since May 2025. The traders are struggling with the expectations of an accelerated rate hike schedule by a more aggressive Fed, under the leadership and direction of Kevin Warsh. Fed funds futures price an implied 54% chance of at least two 25 basis-point increases before the end the year. This compares to a 15.2% probability a week earlier, according to CME Group's FedWatch. The yield on the 10-year Treasury bond of the United States fell by 0.61 basis points, to 4.501%. Gold dropped 1.75% to $4118.55 per ounce. Bitcoin fell 1.56% to $63,368.73 while ether dropped 1.17% to 1,712.74. (Reporting from Gregor Stuart Hunter, Singapore; Additional reporting from Rocky Swift, Tokyo; Editing done by Jacqueline Wong & Jamie Freed).
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Sources claim that Indian Oil did not receive any bids for the ships needed to transport Gulf cargoes.
Two sources with knowledge of the issue have confirmed that Indian Oil Corp. has received "no bids" in the tenders for 'charter vessels' to lift crude oil and liquefied petrochemical?gas from ports within the Strait of Hormuz. Last week, India's largest refiner and fuel retailer floated three tenders for chartering a very-large gas carrier (VLGC), an extremely large crude carrier, and a Suezmax. Indian state refiners buy most of their oil and LPG from Middle Eastern producers free-onboard. A VLCC carries about 2 million barrels of oil. And a VLGC holds 45,000 metric tonnes of LPG, a mixture of propane and butane that is mainly used as cooking gas in India. A Suezmax can carry about 1 million barrels of crude oil. "Nobody wants to risk going into the Strait yet." "Most ship owners are waiting and watching for clarity regarding the terms of getting into the Strait," said a broker. Indian Oil wanted to transport about 45,000 metric tons of LPG from the ports of Ras Laffan, in Qatar, Mina Al Ahmadi, in Kuwait or Ruwais, in the UAE, between June 30th and July '4. The refiner wanted to charter a VLCC for oil deliveries from Mina Al Ahmadi in Saudi Arabia between June 28 and 29. It also wanted to hire a Suezmax to load cargo from Ras Al Khaffji port on the west coast of India between June 29 and 30. (Reporting and editing by Raju Gopikrishnan; Nidhi verma)
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Gold drops as dollar remains firm amid Fed rate hike expectations
Gold prices fell more than 1% on Tuesday due to a stronger?U.S. ?dollar on the expectation of a Federal Reserve rate hike this year. Investors also assessed U.S. As of 0548 GMT, spot gold was down by 1.7% to $4,119.13 an ounce. U.S. gold contracts for August delivery dropped 1.5% to $4137.10. Tim Waterer is the chief analyst at KCM Trade. He said that while gold had benefited from lower oil prices, it was not getting any help from the U.S. dollar, which continued to rise on expectation of Fed rate increases. Gold is less affordable for those who hold other currencies as the dollar has remained near its one-year high. After the first round of talks in a new peace agreement, the United States lifted sanctions against Iran for 60 days starting Monday. Meanwhile, officials in Lebanon reported that fighting had slowed down under the agreement. JD Vance, the U.S. vice president, said that talks with Iranian officials held in Switzerland laid a solid foundation for a peace deal. Iran however denied having begun to discuss its nuclear program. Chicago Fed President Austan Goolsbee stated that the labor?market is stable and that his focus now is to determine whether the too-high rate of inflation will "remain that way" or "recede", as the effects from high tariffs diminish, and if there's a resolution in the Middle East conflict. CME FedWatch Tool shows that traders now expect an 88% probability of a rate increase in December. This is up from 61% prior to the Fed meeting held last week. Investors are watching U.S. The Fed's preferred inflation gauge, Personal Consumption Expenditures, is due to be released later this week. This data will provide further monetary policy clues. Silver fell by 4% at $62.59 an ounce. Platinum dropped 2% to $1.644.75, while palladium declined 2.3% to $1,236.50. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)
European shares fall on Fed hike bets and tech drag
European shares dropped at the opening of trading on Tuesday as fears about increased corporate spending in?AI and expectations for imminent rate?hikes from the Federal Reserve dampened sentiment.
Most sectors in Europe are trading down, as the pan-European STOXX 600 fell by?0.89%? to 633.61 at 0721 GMT.
The tech sector performed well in Europe, but the global trend was positive. As borrowing costs rise, companies that rely on debt to fund their spending will be under pressure.
Asian stocks fell sharply as concerns about Middle East supplies eased and were overshadowed by the tech-driven weakness. South Korea's Kospi Index plunged almost 10% at closing.
According to CME Group’s “FedWatch Tool”, traders expect the Fed to raise interest rates by 50 basis points total by the end this year to combat the inflation pressures caused by higher energy prices.
According to LSEG data, markets are still betting that the European Central Bank (ECB) will increase borrowing costs another 25 bps this year. This is despite the fact that President Christine Lagarde had downplayed the possibility of a second-round effect on inflation? on Monday.
Basic resources, which fell 3.3%, was followed by miners Fresnillo, and Hochschild, who each dropped more than 6%, following the decline in precious metal prices.
European tech stocks fell 2.6% on Monday, following weakness in Asia.
Aixtron, a semiconductor equipment manufacturer, and Infineon, a chipmaker, both fell by 3.8% and 4.8% respectively.
Signify, the largest lighting company in the world, has dropped 15.6% since it updated its strategy. It now aims to achieve an adjusted EBITA of 10% by 2029.
Heineken shares rose by 1.6% after the Dutch brewer named Rafael Oliveira as its new CEO. He replaces?Dolf Van den Brink who quit the company earlier in the year due to a slump in industry sales. Reporting by Utkarsh hathi and Johann M Cherian from Bengaluru, editing by Janane Venkatraman & Mrigank Dhaniwala
(source: Reuters)