Global oil prices spike after Israeli strike on Iran
Global oil prices surged after Israel launched a strike on Iran, escalating fears of wider conflict in the Middle East.
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U.S. stocks closed higher after Iran signaled it wanted to deescalate the conflict with Israel.
Iran signaled through intermediaries it would be open to restarting nuclear negotiations as long as the U.S. doesn’t join Israel in the attacks, according to the Wall Street Journal. President Donald Trump earlier warned Iran not to touch U.S. targets or else it could face the “full strength and might” of the American military.
The WSJ also said that Iran has messaged to Israel that both sides should keep attacks contained.
Iran asked Saudi Arabia and other Arab nations to message Trump about pressuring Israel into an immediate ceasefire to restart nuclear deal negotiations, Reuters reported, citing sources. That helped drop oil prices, eliminating fears of an inflation surge.
The blue-chip Dow added 0.75%, or 317.30 points, to 42,515.09; the broad S&P 500 gained 0.94%, or 56.14 points, to 6,033.11; and the tech-heavy Nasdaq rose 1.52%, or 294.39 points, to 19,701.21. The benchmark 10-year Treasury yield rose to 4.456%. Oil fell 2.27% to $71.32 per barrel.
Oil prices briefly extended gains over the weekend when Israel temporarily knocked out a natural gas processing facility and targeted fuel storage tanks during strikes as part of its campaign against Tehran’s nuclear program. Oil jumped by the most in three years late last week when Israel first attacked Iran and Iran fired back.
“There are no signs it’s spiraling into a broader regional conflict and that’s keeping geo-political concerns anchored” and stock markets buoyed, said Tom Essaye, founder of the Sevens Report.
Investors shrugged off a mixed manufacturing report this morning. Factory activity in the New York region slipped further in June though company managers grew more optimistic about the future, according to a New York Federal Reserve survey.
Federal Reserve policy meeting
The Federal Reserve will meet this week to discuss monetary policy, including interest rates. Almost no one forecasts a rate cut when the Fed wraps up its two-day policy meeting mid-week, according to the CME Fed Watch tool that tracks the odds the market puts on a rate move at each Fed meeting.
May inflation data last week came in cooler than expected, and the labor market is weakening but not cratering. The combination gives the Fed room to wait-and-see, especially amid so much uncertainty still with tariffs and Trump’s mega tax bill still working its way through the Senate.
Along with the Fed’s policy statement after the meeting, the committee will also release its projections. Most economists expect the Fed’s forecasts to show higher inflation later this year, slower economic growth but still relatively low unemployment rate. They are split between whether there will be one or two rate cuts this year.
Corporate news
- Japan’s Nippon Steel will complete its purchase of U.S. Steel after reaching a national-security agreement with the Trump administration. Shares of U.S. Steel rose 5.10%.
- Victoria’s Secret shares added 2.36% after an activist investor took a stake in the retailer to push the company to refresh its board and refocus on its core bra business.
- Roku inked an exclusive partnership with Amazon that enables advertisers to reach roughly 80 million U.S. households through the Amazon platform. Roku stock jumped 10.43%.
- Sarepta Therapeutics shares plummeted 42.12% after the company said a second patient died due to acute liver failure after receiving its gene therapy for a rare form of muscular dystrophy.
- UPS and FedEx were named shipping partners of the Trump Organization’s self-branded mobile network, dubbed Trump Mobile. UPS and FedEx shares each gained around 1%.
- Meta said it will start monetizing WhatsApp’s Channels feature through search ads and subscriptions. The Facboook parent’s shares added 2.9%.
- Reddit unveiled AI-driven advertising tools to help brands track users’ conversations. The message forum’s shares gained 6.79%.
Cryptocurrency
Strategy bought 10,100 bitcoin for about $1.05 billion at $104,080 per bitcoin, according to a social media post by Michael Saylor, the company’s founder and executive chairman.
Saylor, one of Bitcoin’s biggest fans, also reportedly met with Pakistan Finance Minister Muhammad Aurangzeb and State Minister Bilal Bin Saqib to explore how Pakistan might add Bitcoin to its sovereign reserves and long-term financial strategy.
Bitcoin was last up 2.86% at $108,667.
(This story was updated with new information.)
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
