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Wall Street falls as Iran tensions re-ignite, Oil reaches multi-week high
After U.S. President Donald Trump said that the interim peace agreement with?Iran?was "over", and the U.S. declared new military strikes, stocks were mostly lower. Oil prices rose nearly 5% as tensions in the Middle East re-emerged and fears mounted that global energy supply could be disrupted if vessels moving through the Strait of Hormuz were stopped. Brent futures LCOc1 climbed $3.86 or 5.2% to $78.02 per barrel, their highest price since June 19. U.S. West Texas Intermediate crude (WTI)?CLc1 climbed $3.08 or 4.4% to $73.52, its highest level since June 22. This week, data showed that crude oil stocks in the U.S. Strategic Petroleum Reserve?have reached their lowest levels since 1983. Markets are more susceptible to future supply shocks. The Dow Jones Industrial Average, which closed at 52,348.09, was the Wall Street market's?most dramatic selloff. It fell 1.09%. S&P 500 ended with a 0.28% drop to 7,482.59 while Nasdaq Composite managed a 0.2% gain to 25,870.65. The International Monetary Fund warned that the conflict would have a negative impact on global growth in 2015. The MSCI index of global stocks fell by 0.60% to 1,114.54. The market was largely unresponsive to the minutes of Chairman Kevin Warsh’s first rate setting meeting released by Federal Reserve, which revealed concern over rising inflation. Investors were more interested in Warsh's desire for a limited forward guidance. This suggests that investors will have less information about future Fed actions. In a recent note, Russ Brownback said that the Fed has decided to give less information in its post-meeting statements, with forward guidance being placed more in the rearview mirror. He said that while the minutes retain a familiar structure, the statements and the forward-looking language of the policy are noticeably more guarded. The yield on the benchmark 10-year U.S. Treasury note rose for a seventh consecutive day. It was last up 4,01 basis points to 4.569%, after hitting a month-high of 4.58%. Dollar index, which measures greenback against a basket including yen, euro and other currencies, dropped 0.22% on currency markets to?100.96. The yen was hovering around 162.4, which is not far off its 40-year low. Gold prices were also affected by renewed Middle East tensions, and inflation fears that followed. Spot gold dropped 0.52%, to $4.084.19 per ounce. U.S. gold?futures? fell 1.45%, to $4.085.00 per?ounce. Gold is often seen as a hedge to inflation but the metal's non-yielding nature makes it less appealing in an environment with high interest rates. (Reporting from Washington by Pete Schroeder; Additional reporting by Amanda Cooper and Tom Westbrook, in London; Editing by Kevin Buckland and Jan Harvey; Hugh Lawson, Edmund Klamann and Edmund Klamann).
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Gold falls after Trump declares Iran deal 'over
Gold prices dropped on Wednesday, as oil prices'surged' and inflation fears grew after U.S. president Donald Trump said a 'interim agreement aimed at ending conflict with Iran is over. Gold prices fell 0.9% by 2:10 pm EDT (1810 GMT), after they had hit their lowest level since the beginning of July. U.S. Gold Futures for August Delivery settled 1.8% lower, at $4.082.40 an ounce. David Meger is director of metals trading for High Ridge Futures. Iran has reacted to a flurry of hostilities by claiming that it targeted U.S. military targets in?Bahrain? and Kuwait? after U.S. forces had attacked Iranian targets as a response to the attacks?on oil tankers in?the Strait of?Hormuz? Crude oil prices increased by more than 5%. Energy prices that are higher can cause inflation, and central banks may raise interest rates in order to control price pressures. Gold is often seen as a hedge to inflation but the metal's non-yielding nature makes it less appealing in an environment of high interest rates. Concern about high inflation grew?at last month's Federal Reserve meeting, amid fears that price increases are spreading and could require interest rate increases. Minutes of the 'June 16-17 meeting showed that a few participants saw the case for raising rates immediately. According to CME FedWatch Tool, traders are now pricing in a 69% probability of an increase in U.S. interest rates in September. This is up from 62% Tuesday. In a note dated Tuesday, Bank of America said that its 2026 gold forecasts have been reduced by 14%, to $4360, due to a more hawkish Fed. However, it added that $5,000 is still within reach when the tightening cycles ends. Spot silver dropped 2.9% to $58.25 an ounce. Platinum fell 3.6% to $1.580.92 and palladium declined 4.5% to 1,219.84.
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Officials say that a wildfire in central France poses an explosion risk to the KNDS site.
Local officials reported on Thursday that a wildfire in central France has posed a threat to residents of Morthomiers and threatens the industrial site nearby where KNDS manufactures munitions. This would present a risk for explosions or 'further fires'. KNDS confirmed that the wildfire was threatening the munitions site and informed the 500 employees of the facility to evacuate. Officials said that in Morthomiers, 100 residents of the 845-person town have been evacuated and are now sheltering at the 'town hall. It said that an internal firefighting unit had been deployed, and that 'night shift workers' had been put on standby. In a message on X, the prefect of Cher in central France said that the facility had been closed to traffic. He also urged residents of the area to take shelter. Since last week, wildfires have raged in southern Europe. In France, thousands of people were forced to evacuate their homes. The heatwaves that swept across France and western Europe between May and June dries out vast areas, which makes them more vulnerable to wildfires. This week, temperatures are expected to reach 40 degrees Celsius in southwest France. The French Interior Minister announced earlier on Wednesday that a 22 year old volunteer firefighter had died fighting a forest fire in the Savoie region of the French Alps. In the Pyrenees Orientales, the 'Trevillach wildfire' has burned 12,108 acres (4,900 hectares). The local prefect told X that the fire did not spread overnight. This allowed residents from a dozen villages to return to their homes. However, the fire is still not completely contained. The European Commission pre-positioned an unprecedented 777 firefighters from fourteen European countries across high-risk zones in?Cyprus?, Greece?, Italy?, France?, Spain?and Portugal? Portugal and France activated?EU Civil Protection Mechanism at the weekend in response to simultaneous wildfires that scorched thousands of acres. Reporting by Dominique Vidalon and Hugo Lhomedet; Editing and production by Barbara Lewis, David Gregorio and Makini Brice
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Guatemalan zoo breeds rare species of lizards to save endangered species
Conservationists are working in Guatemala to breed a new generation of Guatemalan Beaded Lizards. These lizards are one of the most endangered species in the world. They hope that this will help rebuild the wild populations decimated by habitat loss and the illegal pet trade. Heloderma charlesbogerti is also known as the "nino dormido", or sleeping child in Spanish, and it's endemic in the thornscrub in Guatemala's Motagua Valley. This region, which is one of the driest in Central America, has a lot of thornscrub. Rowland Griffin is the director of La Aurora zoo’s conservation project. He estimates that there are only 500 to 700 wild adults left. The Guatemala City Zoo is monitoring eggs with remote cameras, incubator tanks, and baby lizards to be released next year. He said, "We are just getting them accustomed to eating and climbing. They will need these skills when they are released into the wild." Scientists will monitor the progress of lizards before they are released. In 2007, the species was elevated to the highest protection tier?of CITES, the Convention on the International Trade in 'Endangered Species Of Wild Fauna And Flora. Guatemalan beaded Lizards are known to primarily eat bird and reptile eggs. Their venom is not fatal to humans.
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Oil prices are a 'wake up call' for investors as Trump drives up inflation.
After U.S. president Donald Trump announced on Wednesday that the interim?agreement to end the conflict with Iran "is over", global investors were reminded of the speed at which the oil?market could reignite concerns about inflation and volatility. Oil's 5% increase has pushed down inflation-sensitive assets like bonds and gold. Aneeka Gupta is the director of macroeconomics research at Wisdomtree. We expected "that the oil flow would return to the markets and that inflation expectations would be reduced". Everyone is watching oil After Trump's comments, oil prices jumped up to 6% to reach a new two-week high. Brent futures are still far below the $100 and above they traded at for two months starting in mid-March. This caused policymakers' inflation indicators to flash red. After the U.S. signed a memorandum of agreement with Iran in June to reopen the Strait of Hormuz and release the stranded tankers, prices fell rapidly. It is unclear where the prices will settle after the mini-glut has passed. The latest developments will make tankers less willing to return to the Gulf. KEEPING THE FIDELITY The news came at a bad time for the stock market. There is some doubt in the AI story as traders wonder if companies who have made billions for AI models and chips will continue to do so, if there are no more supply bottlenecks or if the demand doesn't pan out like they expected. Since the Nasdaq reached a record high in June, memory chip makers have experienced a volatile correction. The price of an?ETF that tracks memory chip stocks has dropped by nearly 8%. Meanwhile, the Philadelphia semiconductor index has declined by 5%. The world outside AI has done much better. The S&P 500 equal-weight index, which removes the large impact of the biggest stocks, is up nearly 3%. Europe's STOXX 600, which has "poor AI", is also up 4%. BOND YIELDS SURFACE Bond yields surged after Trump's remarks, taking their cues from oil prices. Traders raised their expectations for price increases, and positioned themselves to increase interest rates, reversing the recent reduction of bets. The contracts tracking the euro zone CPI inflation expectation in a year rose by 14 basis points to 1.992%. Traders last priced in an additional 35 basis points of tightening from the European Central Bank this year, up from 25 basis points on Tuesday. According to LSEG, the Federal Reserve tightened by 36 bps on the Fed Funds Market, while the Bank of England tightened its policy by 32 bps. Markets expect consumer inflation in the U.S. will be just 2.15 % in a year, a sharp drop from the 4.2% recorded in May. The biggest moves were in shorter-dated bonds. These are more sensitive to expectations of interest rates. Germany's and Britain's yields on 2-year bonds both rose 10 basis points to their highest level in just under a week. The U.S. reaction, an energy exporter country, was less dramatic, with 2-year bond yields rising by 5 bps. VOL WAKES UPS Volatility was largely absent in the past few months. But Wednesday's news sent a number of measures higher. Early June saw the VIX index return to pre-war levels, with only a short spike due to concerns about high-flying technology stocks. The same story is told by the volatility?gauges of currencies and bonds -- a nearly unbroken drop in recent weeks and a spike on Wednesday. There are exceptions, such as equity indexes heavily exposed to chips in South Korea and Taiwan, where the volatility is astronomical. Gold Not So Shiny Gold prices are 23% lower than they were before the outbreak of war. It had been on a six month run, which saw the price rise by 70%. After a modest rally that began at the beginning of July, the price of gold is almost back to where it was when the month started, with a daily decline of 1.1%, or $4,060 per ounce. Gold, which is generally considered a safe haven and hedge against inflation rose initially when the Iran War began. However, it fell sharply almost immediately. Investors' thoughts were dominated by the dollar strength and bets on central banks raising rates, rather than safe-haven demand. This put pressure on prices.
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IMF reduces global growth forecast for 2026 to 3%; sees rebound in 2020
The International Monetary Fund lowered its forecast for global growth in 2026 to a slow 3.0% on Wednesday, warning about the ongoing risks associated with the Middle East war, trade fragmentation, and possible corrections to market expectations in AI. The 'global lender' said that the world economy avoided a sharper decline, as demand for AI and technology helped to offset the sharp fall in energy supplies due to the war. The growth rate should return to 3,4% by 2027. However, this is still lower than the 3.5% average seen between 2024 and 2025. The IMF forecasted 3.1% growth in April. The inflation outlook is less optimistic. IMF forecasts that headline inflation in 2026 will rise by 0.3 percentage point to 4.7%, up from April. It also said that it would drop to 3.9% the following year. The IMF said that energy prices are 25% higher than they were before the February 28 war started and will remain so. It was confirmed on June 10 that the Strait of Hormuz would begin to reopen by mid-July and traffic will gradually return to prewar levels by March 2027. It assumes that the average oil price is $89 per barrel. Petya Brooks, deputy head of the IMF research department, said to reporters that they expect a V shape recovery. This year's growth will be weaker than our pre-war projection, but it will rebound next year. The world economy has fared better than expected, and there are few signs of a second-round effect. IMF has raised their forecast for energy exporters, and countries closely linked to the technology sector. However, commodity importers who are not in a position to benefit from AI development have seen their growth predictions downgraded. The projected growth in global trade is expected to drop sharply from 5% to 3.5% by 2026, following a year of heavy front-loading in anticipation of U.S. Tariffs. It will then rebound to 4.3% by 2027. Brooks stated that the spike in oil prices was limited during the war by the release and expansion of commercial and strategic oil inventories. He also cited the rise in energy efficiency, the increase in production outside the Gulf and the steady increase in renewable energy. Private sector also quickly adapted, finding "alternatives" to supply and routes. She said that there was still a great deal of uncertainty. "A new escalation of the conflict could reignite volatility in commodity prices, tighten financial circumstances, strain policy buffers and worsen food security in low-income nations." Another downside risk is a market correction in AI. She said that higher oil prices may also lead to a destabilization of inflation expectations. This would then trigger a correction in the financial situation. The U.S. Military launched a new round of attacks against Iran. Donald Trump, the U.S. president, said that a memorandum with Iran to end conflict had "ended", raising new concerns about the future a fragile ceasefire. Deniz Igan who heads the IMF’s economic updates said that a renewed conflict in the area would put the global economy into a worse situation than the first time. Igan said that many countries had exhausted their oil reserves and were left with little room for maneuver. Prices could rise if countries make a big push to replenish their reserves. The IMF officials noted that inflation and expectations of inflation had remained relatively well-anchored except in some cases. There was also little evidence to date that expectations would shift in the medium term. SCENARIOS?CHANGE In its updated World Economic Outlook, the IMF dropped the three scenarios that it released in April before the U.S. reached a ceasefire agreement with Iran, and reverted to a traditional baseline 'forecast. The reference?forecast from April assumed a shorter conflict. The IMF raised its forecast for 2027 by 0.1 percent points to 2.2%, compared with the April forecast. The eurozone's growth forecast for 2026 was lowered to 0.9%, from the 1.1% forecast in April. Its 2027 forecast remained unchanged at 1.2%. The growth forecast in Japan for 2026 was revised down by 0.1 percentage points to 0.6%. In 2027, the forecast was raised by the equivalent amount to 0.7%. South Korea's growth rate was revised up by 0.7 percentage points to 2.6% due to strong growth in AI Hardware exports. The growth forecast for emerging market and developing countries was also cut by 0.1 points, to 3.8%. However, the forecast for 2027 has been raised by 0.3 percentage points to 4.5%. China's growth is now expected to reach 4,6% in 2026, after a strong quarter. This is up from April's?forecast, which was 4.4%. In 2027, growth will reach 4,1%, up 0.3 points from April. India, which is one of the fastest-growing economies in the world, was also downgraded to 6.4% from 6.5% for 2026, while the IMF raised its forecast for 2027 to 6.7%, up from 6.5%. The IMF raised its forecast for 2027 by 1.9 percentage point to 6.5%. (Reporting and editing by Christian Schmollinger, David Gregorio, and Andrea Shalal)
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How Iran's disputed nuclear program became more important than its 'golden weapons' in Hormuz
The wording of the interim deal fuels differing interpretations between Iran and the U.S. about who manages transit * Tehran used to view the closing of waterways as a final resort * Iran will not start nuclear negotiations until Washington accepts Washington's authority over the Strait By Parisa Hafezi & Angus McDowall DUBAI, 8 July - The Strait of Hormuz is now a "golden" weapon for Iran. It is willing to risk escalating tensions with the United States for this goal, which is more important than its nuclear program for which the country has accepted sanctions for decades. The issue of Iranian strategy is so important that this week ships that passed the 'Strait' without Tehran's permission were fired on, leading to a 'fire exchange' with the United States which threatens the interim peace agreement last month. The Iranian leadership, which had resisted for years to choke off the fifth global energy supply passing through Hormuz now sees it as their strongest hand in a number of disputes with the West and the reason Washington concluded the war. Ebrahim Azizi wrote on social media that the United States should recognize the new Iranian order at the Strait of Hormuz. This is the only path forward. Two senior Iranian sources said that while Tehran's insistence on maintaining control of the waterway could lead to a long-term dispute, there was little disagreement about the policy. One source said that there had been some discussion about whether Iran was overplaying its hands, but the general opinion in the top circles was no rational country would give up such a powerful leverage point. The source said that they wanted to remove Iran's "golden weapon" - the issue of Hormuz - and this would be impossible. The interim agreement signed by President Donald Trump last month to end the conflict opened up the strait for more traffic, but it was left vague on its ultimate fate. While President Donald Trump opened up the Strait of Hormuz to more traffic last month, the final fate of the waterway was not specified in the interim agreement. In the memorandum, Iran promises to "make arrangements for safe passage for commercial vessels without charge for 60 days". Iranian negotiators read?that as the U.S. recognizing the Islamic Republic’s right to control the waterway for two months, even if it means not charging tolls or fees. The United States and Gulf States reject this interpretation. They believe that the language means that Iran must facilitate safe passage of vessels, not impose any restrictions or enforce them with force. HORMUZ IS PRIORITIZED OVER NUCLEAR ISSUES Iran's position is based on a distrust for the United States, exacerbated by Trump's decision in 2018 to rip up a nuclear agreement, his return to the war this year, after agreeing a ceasefire during the summer, and his unannounced war launch while a diplomatic process was underway. One of the sources stated that if Iran backs down on Hormuz he would intensify his demands for other areas, including the nuclear dossier and Iran's conventional missile stock, stating such a move was "surrender and this is impossible". Iran has warned that it can close the Strait for years, and once said that it would be as easy as drinking water. However, senior officials have also privately stated that they are reluctant to do this as it is a last resort. They were hesitant because they feared increasing their isolation internationally by making a decision that would anger Gulf neighbours as well as global energy consumers and, ultimately, hurt their own economy. Iranian officials thought they had nothing to lose when Israel and the United States?attacked Iran's supreme leadership and other top officials on February 28. The Iranians closed the Strait of Hormuz to all traffic except their own. This caused the largest disruption in?global energy supply history. Washington, after hesitating about the effect on oil prices added its own blocking of Iranian ports in late April. The cost of the blockade on Hormuz eventually became so high that the two sides reached an agreement. Iran believes that after forcing the U.S. into a negotiating position by closing the Strait, it now needs to formalise this ability. Both sides were anxious about the immediate economic issues they faced. Both sides believe they have won. There's a view that both sides just need to push further to get their desired outcome, said Ali Ansari - a professor of modern history at St Andrews University. Iran has now shifted its focus to the Hormuz issue, and believes Washington has accepted its right to enrich uranium at home. Trump's war was primarily motivated by the nuclear issue, which had been the main source of disagreement between Iran and the United States over the past 25 years. It also prompted major international sanctions against Iran. The negotiations over Iran's nuclear program were reduced to further discussions as part of the interim agreement that ended the war. Senior Iranian sources said that Iran would not even start talks about the nuclear issue unless the United States accepted its full control of the Strait of Hormuz. Reporting by Parisa hafezi and Angus McDowall, Editing by Peter Graff
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Gold prices fall after Trump declares Iran deal 'over
Gold prices dropped on Wednesday, as oil prices soared and inflation fears intensified after U.S. president Donald Trump declared that the?interim deal aimed at ending conflict with Iran is "over". Gold spot dropped by 2%, to $4.025.67 an ounce at 11:35 am EDT (1535 GMT), after reaching its lowest price since July 1. U.S. Gold Futures for August Delivery fell 2.9% to $4.035.20 an ounce. David Meger is director of metals at High Ridge Futures. He said that the main reason for the move today was the "increased escalation" in tensions between Iran and the U.S. With a possible ceasefire ending, risk assets have traded lower across the board, including gold. Iran has retaliated against U.S. military targets in Bahrain and Kuwait in a 'flame-up of hostilities' after U.S. forces attacked Iranian targets in response to attacks on oil tankers in Strait of Hormuz. Crude oil prices rose by more than 5%. Inflation can be fueled by higher?energy costs, and central banks may raise interest rates in order to control price pressures. Gold is often seen as a hedge to inflation but the metal's non-yielding nature makes it less attractive in an environment with high interest rates. The Federal Open Market Committee minutes for its June 16-17 meeting are due at 2:00 pm EDT (1800 GMT) to provide further hints on the monetary policy. Meger stated that the market is searching for information to help clarify the path of future rate increases. According to the CME FedWatch Tool, traders are now pricing in a 70% probability of an increase in U.S. interest rates in September. This is up from 62% Tuesday. In a note published on Tuesday, Bank of America said that its 2026 gold forecasts have been reduced by 14%, to $4360, based on a more hawkish Fed. However, it added that $5,000 is still within reach once the tightening cycles ends. Silver spot fell by 4.5%, to $57.33 an ounce. Platinum dropped 4.4%, to $1.568.93. Palladium was down 4.9%, to $1.213.93.
US Diesel Futures Post the Biggest Daily Gains in Four Years After Russia Bans Exports
U.S. Diesel futures are set to make their biggest daily gains in the last four years on Wednesday, after Russia announced an export ban. This has heightened supply concerns for a market that is still grappling with uncertainties about Middle Eastern oil flow.
The benchmark ultra-low sulfur futures contract on the New York Mercantile Exchange closed up 11.6% to $154.71 a barrel, its highest level in more than a month. It also marked the largest daily gain for the contract since march 2022. The price spike in response to the 'Russian export ban', imposed in response to intensifying drone attacks by Ukraine on its refineries highlights the tightness of the global diesel markets. Diesel production has been limited by the attacks on Russian refineries and other plant closures, as well as years of supply cuts from the OPEC+ and disruptions resulting from the Iran War.
Tom Kloza, Gulf Oil's chief energy advisor, said: "Diesel should be the product everyone is watching." It was emphasized even before the Russian banning, and now you have a very strong setup for the middle barrel.
According to government data released on Wednesday, the United States' diesel and heating oil stocks fell by almost 5 million barrels in the last week, down to 103.6 million. This was due to a record-breaking seasonal export and a strong domestic demand. This is about 7% less than the average for the past five years.
Energy Information Administration data released on Wednesday showed that U.S. distillate fuel exports were averaging 1.7 million barrels per day, the highest ever for the beginning of July. Domestic demand was 4.3 million barrels per day, which is 1.6% more than it was at the same time last year. Although the United States does not import any Russian diesel anymore, U.S. customers could still "feel" the pinch as nations who do rely upon Russian flows are likely to turn west for replacement barrels.
The expected pull from other nations on a tighter market may translate into higher prices in the US. Consumers are now facing new inflation worries. Kloza said that wholesale diesel prices will rise by more than 40 cents a gallon as a result of the Russian export ban. The developments are likely to translate into better profits for U.S. refiners: "the diesel futures cracked spread, or the differential between the price the fuel and crude oil price, surged above $80 per barrel on Wednesday." This is the highest price since early April. Reporting by Shariq KHan and Scott DiSavino, New York; editing by Chizu NOMIYAWA
(source: Reuters)