Oil prices retreated on Wednesday as the temporary cease-fire between Iran and the United States appeared to hold, despite recent flare-ups in hostilities.
This week, Israeli attacks in Lebanon and U.S. strikes on Iranian boats and missile launch sites, after a period of relative calm, raised new questions about the prospects for a peace deal, even as President Trump and his administration insisted an agreement was within reach.
Oil prices fall.
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The price of Brent crude, the global benchmark for oil, was down more than 2 percent to around $95 a barrel for August delivery, currently the most heavily traded contract.
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West Texas Intermediate crude, the U.S. benchmark, fell about 2 percent to around $92 a barrel for July delivery, currently its most popular contract.
Stocks are mixed.
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Futures on the S&P 500 were little changed, offering no indication of how stocks will open when the market resumes trading in the United States on Wednesday. The benchmark U.S. index closed at a fresh record high on Tuesday.
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Stocks in Asia, where countries import vast quantities of oil and gas, were mixed. Shares in Taiwan and South Korea rose about 2 percent, while stocks in Hong Kong and mainland China were lower.
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In Europe, the Stoxx 600, a broad-index that tracks the region’s largest companies, posted a modest gain.
Gasoline prices drop.
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Gas prices fell three cents on Wednesday to a national average of $4.46 a gallon, according to the AAA motor club. Since the war began, the cost of gas for drivers has risen by 50 percent.
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Gas prices don’t move in lock step with crude, usually trailing increases or drops by a few days.
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The average price of diesel fell slightly to $5.58 on Wednesday, but remains 49 percent higher since the start of the war.
What they are saying: ‘A bumpy path to higher returns’
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Analysts at Goldman Sachs raised their year-end forecast for the S&P 500, and now expect the stock index to rise a further 6 percent. The upgrade reflects a brighter outlook for corporate profits after an “exceptionally strong” batch of reports for the first quarter, the analysts said.
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However, the analysts warned, the “earnings-driven outperformance of A.I. infrastructure stocks” may not be able to continue at the same pace, and “the oil shock threatens to create the conditions of disappointing growth and tightening financial conditions that have marked the ends of previous bull markets.”
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