* Equities, currency, Treasury investors in wait-and-see
mode
* Iran shows no sign of opening Strait of Hormuz
* Trump vows to attack civilian infrastructure if no deal
* Brent dips to near $109 a barrel
* US crude climbs close to $113 a barrel
NEW YORK/ LONDON, April 7 (Reuters) – MSCI’s global
equities gauge fell slightly while the dollar and U.S.
Treasuries were little changed on Tuesday as investors awaited
the outcome of a standoff between the U.S. and Iran.
In a choppy session for oil, which has been beset by supply
concerns, U.S. crude futures settled slightly higher, near $113
per barrel after earlier rising above $117 while Brent finished
down slightly.
While Iran showed no sign of bowing to U.S. President Donald
Trump’s ultimatum to open the Strait of Hormuz by the end of the
day, Iranian media reported that strikes on Iran had intensified
and hit railway and road bridges, an airport and a petrochemical
plant. Trump has threatened to destroy every bridge and power
plant in Iran if the country does not meet his deadline.
Iran responded by declaring that it would no longer hold
back from hitting infrastructure in its Gulf neighbors, and said
that it carried out fresh strikes on a ship in the Gulf and a
huge Saudi petrochemical complex.
Investors have been laser-focused on the U.S.-Israeli war
with Iran, which is now in its sixth week, as wild volatility in
oil prices has increased concerns about inflation and a
potential slowing of the global economy. Wall Street indexes
were falling modestly on Tuesday, having made little progress in
recent days, as hopes for a quick resolution to the war have
been replaced by nervous uncertainty ahead of Tuesday’s
deadline.
HEADING FOR THE SIDELINES
With no clarity on the outcome, Rick Meckler, a partner at
Cherry Lane Investments in New Vernon, New Jersey, said the
majority of investors are staying in “watch mode” as investment
decisions are “extremely difficult” to make ahead of Tuesday’s
deadline.
“It’s leading most investors to head to the sidelines
because why sell everything if this is headed for resolution and
why buy something if you could be seeing a very significant
decline in a matter of days?” said Meckler, suggesting that if
Trump carries out his threat, this would usher in a “very
bearish period” for markets.
“There’s no clear play here unless as an investor you’ve
decided you’re relatively certain where this is headed,” Meckler
said.
In U.S. equities, at 2:48 p.m. ET (1848 GMT) the Dow Jones
Industrial Average fell 281.05 points, or 0.60%, to
46,388.83, the S&P 500 fell 37.61 points, or 0.57%, to
6,574.22 and the Nasdaq Composite fell 182.37 points, or
0.83%, to 21,814.42.
MSCI’s gauge of stocks across the globe
fell 3.48 points, or 0.35%, to 994.18.
Earlier, the pan-European STOXX 600 index finished
down 1.01%, while Europe’s broad FTSEurofirst 300 index
fell 24.68 points, or 1.04%.
Iran has effectively closed the Strait of Hormuz, a global
transit chokepoint through which a fifth of oil and gas is
shipped, since the start of the war on February 28. It has
pushed back against U.S. pressure to reopen the strait, saying
it wants a lasting end to the war instead of a temporary
ceasefire.
Meanwhile the U.S. Energy Information Administration said on
Tuesday fuel prices could keep rising for months even after the
Strait reopens, in contrast with Trump’s assurances that
consumers will see immediate relief when the war ends.
Oil prices, which have moved sharply in response to supply
concerns stemming from the war, were a mixed bag on Tuesday with
U.S. crude rallying while Brent was little changed.
U.S. crude settled up 0.48%, or 54 cents, at $112.95
a barrel after earlier touching $117.73. Brent settled
at $109.27 per barrel, down 0.46%, or 50 cents, on the day.
CONFLICT TRIGGERS ECONOMIC FEARS
Inflation concerns have also upended the global rates
outlook, with traders no longer pricing in any rate cuts from
the U.S. Federal Reserve this year.
Chicago Federal Reserve Bank President Austan Goolsbee said on
Tuesday he is worried that the war will drive inflation higher
even as it slows the U.S. economy, putting the Fed in an
uncomfortable position where there is no obvious “cookbook” for
what to do.
U.S. Treasuries yields were little changed as investors were
wary of making big bets.
“That’s the mother of all deadlines right there, and
everybody seems to be waiting for it,” said Tom di Galoma,
managing director of global rates trading at Mischler Financial
Group.
“I don’t think anybody really wanted to buy Treasuries with
the chance that oil could go to $150 (a barrel), and that’s the
scary part of this whole thing. They should be buying Treasuries
as a safe-haven bid, but for the most part, it’s very tough to
do with the chance that oil could accelerate,” di Galoma said.
The yield on benchmark U.S. 10-year notes rose
0.4 basis points to 4.339%, from 4.335% late on Monday while the
30-year bond yield rose 2.5 basis points to 4.9152%.
The 2-year note yield, which typically moves in
step with interest rate expectations for the Federal Reserve,
fell 1.7 basis points to 3.833%.
In currencies, the U.S. dollar traded close to its highest
levels in almost 11 months with investors pausing ahead of the
U.S. deadline for Iran.
The dollar index, which measures the greenback
against a basket of currencies including the yen and the
euro, fell 0.16% to 99.84. It had hit 100.64 last week, its
highest since May 2025.
The euro was up 0.29% at $1.1575 while against the
Japanese yen, the dollar strengthened 0.06% to 159.78.
In cryptocurrencies, bitcoin fell 1.94% to
$68,476.82. Ethereum declined 2.75% to $2,090.06.
In precious metals, gold prices were modestly higher while
silver fell as caution prevailed. Spot gold rose 0.61% to
$4,675.82 an ounce while spot silver fell 1.35% to $71.81
an ounce.
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