Oil prices crept higher on Thursday as investors weighed fears that the energy shock from the U.S.-Iran war will push up inflation around the world. But stocks rose on continued optimism over artificial intelligence.
Markets were keen for any updates from the meeting between President Trump and Xi Jinping, China’s leader. The summit was full of pleasantries, with Mr. Trump praising Mr. Xi, who delivered a stark warning on Taiwan, saying relations between Beijing and Washington could enter an “extremely dangerous place” if Mr. Trump ignored China’s demands.
The war in Iran has cast a shadow of uncertainty on the summit. Mr. Trump is expected to press Mr. Xi to persuade Iran to end the war and reopen the Strait of Hormuz, the crucial waterway that has been effectively blocked since the war started.
Oil prices edge higher.
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The price of Brent crude, the global benchmark for oil, rose about 1 percent on Thursday, and is about 45 percent higher than before the war started.
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West Texas Intermediate crude, the U.S. benchmark, inched up about 1 percent, after ending Thursday at $102.18 per barrel.
Stocks climb on A.I. boom.
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Futures trading in the S&P 500 ticked higher, suggesting a modest increase when stock markets open later in the day. The S&P 500 has hit record highs as investors have rallied around stocks of tech companies spending more on artificial intelligence.
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In Europe, stocks inched higher. The Stoxx 600, a broad European index, rose slightly, and the DAX in Germany climbed 1 percent. In Britain, where the economy grew 0.6 percent in the first three months of the year, the FTSE 100 was flat.
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Stocks in Asia were mixed. In South Korea, the benchmark Kospi index, jumped nearly 2 percent pulled up by chipmakers, but the Nikkei 225 in Japan fell 1 percent.
Gas prices rise again.
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Gas prices rose two cents on Thursday, to a national average of $4.53 for a gallon of regular, according to the AAA motor club. The jump in gas prices has driven up costs at the pump 52 percent for Americans since the conflict began.
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Gas prices don’t move in lock step with changes in crude oil prices, usually trailing increases or drops by a few days.
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The average price of diesel fuel were flat at $5.67 a gallon on Thursday, up 51 percent since the start of the war.
What they are saying: “Inflation pressures are building.”
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The momentum in the tech rally and hope for a positive outcome from the Trump-Xi summit are bolstering investors, Bob Savage, the head of markets macro strategy at BNY, wrote in a research note.
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But price pressures are emerging as a dominant concern. “Underlying inflation pressures are building globally, raising the risk of tighter financial conditions,” he wrote.
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