Wall Street follows global markets higher and oil retreats despite new barrage out of Iran
BNN Bloomberg
Wall Street followed global markets higher Wednesday and the price of U.S. crude fell eased despite a new barrage of attacks by Iran on its Gulf neighbors.
Futures for the S&P 500 and the Dow Jones Industrial Average each rose 0.5 per cent ahead of the Federal Reserve’s decision on interest rates later in the day. Nasdaq futures climbed 0.6 per cent.
U.S. benchmark crude fell US$1.24 to $94.53 per barrel. Brent crude, the international standard, rose 75 cents to $104.17 per barrel. That’s down from more than $106 on Monday.
With higher oil prices feeding into other inflation, the Fed is widely expected to keep rates on hold Wednesday.
The Fed will also release a set of quarterly projections, which could result in the central bank trimming its forecast of one rate cut this year, to zero. Though seemingly a minor adjustment, it would be a major course correction after 18 months of on-again, off-again rate cuts.
The Iran war has made it a particularly difficult time for policymakers to issue economic projections. Gas prices are soaring and will push up inflation for at least the next month or two. The average price for a gallon of gasoline spiked again overnight, reaching $3.84. A gallon of gas last month, before the U.S. and Israel attacked Iran, was well under $3.
Oil tankers are crossing the Strait of Hormuz and Iran’s actions to choke traffic through the shipping route have not hurt the U.S. economy, White House economic adviser Kevin Hassett told CNBC on Tuesday, reiterating the Trump administration’s position that the war should be over in weeks, not months.
Canada’s annual inflation rate slowed in February to 1.8 per cent, but many economists believe the new Statistics Canada data may be the dip before a spike driven by oil prices and the war in Iran.
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Canadian and U.S. stock markets gained ground on Wednesday as oil prices fell and tech stocks rose on both sides of the border.
Nvidia CEO CEO Jensen Huang has started his keynote at the chipmaker’s annual developer conference in San Jose, Calif., where he is set to detail its hardware and software plans.
Daily oil exports from the Middle Eastern Gulf, home to top exporter Saudi Arabia and other major producers, have dropped by at least 60 per cent in the week to March 15 compared to February due to disruptions and output cuts amid the U.S.-Iran war, according to shipping data and Reuters calculations.
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Member countries of the International Energy Agency could release more oil into the market later “as and if needed” after they have already agreed the largest-ever reserve release, Executive Director Fatih Birol said on Monday.
Oil prices are down, and stocks are up Monday, though such moves have been quick to reverse since the war in Iran began.
Statistics Canada says the annual rate of inflation dipped below two per cent in February as the end of last year’s federal “tax holiday” helped take some steam out of the yearly price comparisons.
Middle Eastern sovereign wealth funds and state-backed companies are unlikely to scale back renewable energy investments in Africa despite disruptions from the Iran war, analysts say, given the strong long-term economic and strategic reasons driving such funding.
Crude oil stayed above US$100 a barrel on Monday and Gulf countries reported more attacks by Iran as the war entered its third week, while share prices were mixed.