Stocks Drop And Oil Rises As Hormuz Hopes Fade
Stocks Drop And Oil Rises As Hormuz Hopes Fade
Asian stocks mostly fell and oil prices extended gains Tuesday as hopes for a reopening of the Strait of Hormuz faded and expectations grew that the US Federal Reserve will hike interest rates again next month.
Hopes for an easing of Middle East tensions were dashed at the weekend when US President Donald Trump rejected Iranâs offer for a seven-day truce. While he said talks would resume this week, that failed to lift sentiment on trading floors.
Both main crude contracts rose over 1 percent on Tuesday. Brent futures traded around $107 a barrel after touching $108.83 on Monday, while markets in Tokyo, Hong Kong, Shanghai, Seoul and Sydney all declined. US stocks and Treasuries also fell on Monday as oil pushed higher.
The US President on Monday denied a report by Axios that he offered Iran sanctions relief and release of frozen funds in exchange for concrete steps on its nuclear program.
"Axios just released a story that âTrumpâ offered Sanctions Relief and Frozen Funds to Iran. This is untrue. I offered them NOTHING!" Trump wrote on Truth Social, calling the story a "HOAX".
Iranâs state broadcaster said Foreign Minister Abbas Araghchi will meet Qatari representatives to discuss messages exchanged with the US through intermediaries, particularly regarding conditions for reopening the Strait.
However, Tehran officials have privately expressed pessimism about a deal before Novemberâs US midterm elections. The Strait of Hormuz remains key to global oil and gas shipments and is now central to the conflict, with Iran-backed Houthis seizing Yemenâs Red Sea coast including the Bab al-Mandab Strait.
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