Stocks rise, oil down as traders weigh Iran sanctions threat
Stocks mostly rose Tuesday while oil prices slid after the United States warned of new sanctions against Iran, which investors saw as lessening the chances of renewed military strikes after six months of war in the Gulf.
Treasury Secretary Scott Bessent said the White House was declaring an "economic D-Day" against Iran and threatened to hit countries that trade with it.
The threat comes as talks to reopen the Strait of Hormuz remain stalled, with neither side showing any sign of backing down.
That had pushed oil prices up for most of August, fuelling inflation fears and pressuring bond markets.
The US said expanded "secondary" sanctions would target Iran's digital assets, technology, gold, aviation and shipping sectors, but gave no timeline and named no specific countries beyond Iran.
Analysts said the measures were softer than expected.
"European stock markets rebounded early Tuesday with some relief evident from the lack of any material increase in the economic pressure on Iran," said Neil Wilson, investor strategist at Saxo UK.
Oil prices fell around three percent, with the international benchmark Brent back below $90 a barrel.
In Europe, London, Paris and Frankfurt rose, with German data showing the country's second-quarter growth was stronger than previously estimated.
Attention is also focussed on Nvidia's earnings release on Wednesday, which have become a key test of the AI boom as concerns grow over whether the sector can match lofty expectations.
"The most actively traded stocks in the US right now are all the major AI names... this adds to evidence that Nvidia's results will be a key driver of price action, and potential volatility later this week," said Kathleen Brooks, research director at XTB trading group.
In Asia, tech-heavy Seoul rose, along with Tokyo and Shanghai, while the Hong Kong market was flat.
Investors are also looking to the annual Jackson Hole gathering of central bankers, economists and finance chiefs beginning Thursday, where Federal Reserve boss Kevin Warsh is due to speak.
His comments will be parsed for clues about monetary policy, with inflation still stubbornly high and after Bessent said the Treasury would buy back more of its own bonds to push down borrowing costs after the 30-year yield hit a 19-year high.
The move has weighed on the dollar and helped lift bitcoin above $80,000 for the first time since May, with the prospect of crypto-friendly US legislation also providing support.
The Canadian dollar edged slightly lower against the US dollar after US President Donald Trump vowed to double tariffs on Canadian vehicles, fanning a trade war.
Trump's threat comes after the neighbours failed to reach a deal to avert new 50 percent US tariffs on select Canadian goods. Canada will announce Tuesday its response to the new levies.
- Key figures at around 1100 GMT -
West Texas Intermediate: DOWN 3.0 percent at $82.49 per barrel
Brent North Sea Crude: DOWN 2.8 percent at $89.59 per barrel
London - FTSE 100: UP 0.2 percent at 10,879.24 points
Paris - CAC 40: UP 0.4 percent at 8,486.32
Frankfurt - DAX: UP 0.8 percent at 26,313.52
Tokyo - Nikkei 225: UP 0.5 percent at 65,856.43 (close)
Hong Kong - Hang Seng Index: FLAT at 25,511.10 (close)
Shanghai - Composite: UP 0.2 percent at 3,889.44 (close)
New York - DOW: UP 0.3 percent at 53,417.16 (close)
Dollar/yen: UP at 159.29 yen from 159.15 yen on Monday
Euro/dollar: UP at $1.1665 from $1.1663
Pound/dollar: UP at $1.3630 from $1.3629
Euro/pound: DOWN at 85.56 pence from 85.57 pence
T.Moens--JdB
