By Dow Jones Newswires Staff
Brent crude oil fell back below $80 a barrel and U.S. stock futures rose in early European trade as further detail on a memorandum of understanding between the U.S. and Iran lifted sentiment.
Under the deal, the U.S. will waive sanctions on Iranian oil sales, The Wall street Journal reported. The memorandum also includes lifting U.S. and Iranian blockades in the Strait of Hormuz.
The dollar and Treasurys were little moved ahead of Wednesday's Federal Reserve policy decision, where policymakers are expected to hold rates steady. Investors will parse Kevin Warsh's comments following his first meeting as chair, with analysts split over whether the Fed's easing bias will be maintained. U.S. retail sales data for May will also add to the macro picture.
--In early trading, Brent crude oil was down 0.6% to $78.50 a barrel, while WTI fell 0.8% to $75.46 a barrel. Both benchmarks settled more than 5% lower in the previous session--their lowest closes in more than three months. Meanwhile, data provider Kpler said that at least two Iranian-linked supertankers carrying Kharg Island crude appear to have crossed the U.S. naval blockade line, potentially signaling coordinated fleet activity ahead of any formal sanctions or blockade removal.
--Futures for U.S. stocks were in the green after weakness in semiconductor stocks weighed on markets Tuesday. Futures for the S&P 500 were up 0.3%, while the Dow Jones Industrial Average nudged up 0.1%. The tech-heavy Nasdaq gained 0.8% as semiconductor stocks rallied in after-hours trade, with Micron Technology adding 4.4%.
--Asian equities were mixed Wednesday afternoon. Japan's Nikkei Stock Average rose 0.7% while South Korea's Kospi added 1.6% to close at another record high, with both indexes benefiting from a rally in AI-related stocks. Memory chip maker SK Hynix gained 5.8%. China's benchmark Shanghai composite climbed 0.4%. Hong Kong's Hang Seng index was 0.8% lower as discretionary consumer stocks fell.
--European stock indexes were mixed in cautious opening trade. The Europe-wide Stoxx 600 was flat. Autos fell after BMW cut its outlook, with the carmaker tumbling 8% in Frankfurt and dragging peers lower. The German DAX slipped 0.15%. In Paris, the CAC 40 edged up 0.1%, though cross-listed Stellantis fell 2.6%, while chip maker STMicroelectronics extended losses, falling 1.2%. Industrials strengthened as oil prices fall. Rolls-Royce rose 1.7% in London, as the FTSE 100 traded flat. The Italian FTSE MIB and Spanish IBEX 35 slipped 0.1%, while the Dutch AEX rose 0.2%.
--The dollar traded steady. Warsh is unlikely to vote for a rate cut straight away, Commerzbank's Antje Praefcke said in a note. For the dollar, the decisive factor will be whether he describes the energy price shock as temporary and leaves market expectations for future rate rises looking unjustified, she said. The DXY dollar index traded flat at 99.554.
--U.S. Treasury yields were marginally higher in Asian trade. The Fed is broadly expected to leave policy rates unchanged at 3.50%-3.75%, while the main element of surprise is expected to come from Warsh's first FOMC meeting and press conference as Fed chairman, said Carmignac's Kevin Thozet in a note. "Investors are now almost evenly split between the prospect of further tightening and that of policy easing, effectively pricing a steady Fed through year-end," Thozet said. The two-year Treasury yield was up 0.3 basis point at 4.047%, while the 10-year yield rose 0.6 basis point to 4.433%, according to Tradeweb
--Eurozone government bond yields fell in early trade, responding to weaker-than-expected U.K. inflation data. U.K. annual CPI inflation remained at 2.8%, against expectations in a WSJ poll for a rise to 3.0%. Pressure on the Bank of England to hike rates this year will "continue to fade" as a result, Aberdeen's Luke Bartholomew said in a note. The BOE is expected to hold rates on Thursday, although one or two policymakers could still vote for an increase, he said. Government bond supply in the eurozone is due from Germany, which will auction a total of 2.5 billion euros in 2047- and 2053-dated Bunds. The 10-year Bund yield fell 2.2 basis points to 2.920%, according to Tradeweb.
--Bitcoin fell 0.4% to $65,522, LSEG data show.
--Gold prices were largely unchanged early Wednesday. Easing inflationary pressures would typically weigh on non-yielding assets like gold but the precious metal is supported by lingering geopolitical uncertainty and cautious investor sentiment, MUFG's Soojin Kim wrote. New York gold futures traded 0.2% lower at $4,344.70 a troy ounce.
Write to Barcelona Editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
June 17, 2026 04:17 ET (08:17 GMT)
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