By Dow Jones Newswires Staff


Oil fell in early morning European trading after initially rising following fresh U.S. military strikes on Iran. U.S. futures are higher after tech-related losses and inflation data hurt markets on Wednesday. Treasury yields and bitcoin are up, while gold is down.

The U.S. attacked multiple targets near the Strait of Hormuz late Wednesday after President Trump said earlier in the day that Iran had taken too long to negotiate a deal and would "have to pay the price." In response Iran is reported to have closed the strait--through which a fifth of the world's oil passes--with immediate effect.

SpaceX is due to price its initial public offering later Thursday and make its debut on the New York Stock Exchange Friday.

Eyes will also be on the European Central Bank, which is expected to raise interest rates for the first time in nearly three years later Thursday in response to rising inflation due to the war in the Middle East. The U.S. Federal Reserve and Bank of England are due to meet next week and are expected to hold rates for now, but markets expect both to raise by the end of the year.


--U.S. futures are up after posting deep falls in the prior session after inflation data came in at a three-year high as the war in the Middle East pushes up oil prices. Indexes were also hurt by technology stocks on fears that the bubble may have peaked, just ahead of SpaceX's IPO. Futures for the Dow Jones Industrial Average are up 0.6%, while the S&P 500 and Nasdaq are both 0.7% and 1% higher.


--Asian stocks mostly fell as heightened U.S.-Iran tensions and rising U.S. inflation both weighed on market sentiments. Hong Kong's Hang Seng Index fell 0.8% with the Hang Seng Tech Index declining 1.6%. Beijing's market regulator summoned five major Chinese e-commerce platforms, including Alibaba and JD.com over issues including excessive competition, sending their shares down 5.5% and 3.4%, respectively. China's Shanghai Composite Index edged 0.2% lower while South Korea's Kospi added 0.4%.


--European indexes were up in early trading, boosted by energy stocks after the U.S. launched fresh military action against Iran, sending oil prices initially higher. The Europe-wide Stoxx 600 was up 0.4%, while London's FTSE 100-index and France's CAC 40 were both up 0.5%. Germany's DAX was up 0.03%, with software giant SAP--the second most valuable company of the index--down 3.9% following a selloff in tech stocks in the U.S. overnight. Hugo Boss shares were up 6.5% after Mike Ashley's Frasers Group launched a takeover to buy the remaining shares of the German premium-apparel company it doesn't own.


--The dollar traded steady as investors considered the latest developments in the Middle East conflict and Wednesday's U.S. inflation data ahead of the June 17 Federal Reserve policy decision. Headline annual inflation rose to 4.2% in May as expected but markets focused on core inflation easing more than forecast on a month-on-month basis to 0.2%. This "buys the Federal Reserve some breathing room," Evercore ISI analysts say in a note. The DXY dollar index was stable at 99.993.


--Bitcoin edged slightly higher but its recovery from last week's heavy losses remains limited. Geopolitical uncertainty can pressure bitcoin in the short term as traders reduce exposure to speculative assets but the cryptocurrency can attract longer-term interest when investors look for alternatives to traditional assets, Zaye Capital Markets analyst Naeem Aslam says in a note. Wednesday's inflation data also have mixed implications for bitcoin, he says. Bitcoin rose 1.9% to $62,894, having reached a 20-month low of $59,125 Friday, LSEG data show.


--Yields on U.K. government bonds, or gilts, climbed after the U.S. and Iran launched a fresh wave of attacks on Wednesday, raising concerns about an escalation in the conflict. Market focus is also on the European Central Bank rate decision due at 1215 GMT, where an interest rate increase is expected. Ten-year gilt yields rose 1.6 basis points to last trade at 4.941%, Tradeweb data show.


--Eurozone bond yields edged higher, responding to a modest rise in oil prices, while investors focus on the European Central Bank's upcoming rate decision. The key focus of the meeting will be how much guidance the ECB will give on the future rate path beyond the expected hike, and what outlook the updated staff forecasts will indicate. "For markets, the key question is how this move is framed: 'one and done' or the beginning of a tightening cycle," says Julien Lafargue, chief market strategist at Barclays Private Bank. The 10-year German Bund yield was up 0.9 basis points at 3.079%, according to Tradeweb.


--Oil prices fell in early European trading despite a fresh wave of attacks between the U.S. and Iran dimming hopes for a near-term resolution of the conflict. Brent crude was down 0.8% to $92.40 a barrel, while WTI futures edged 0.7% lower to $89.43 a barrel after settling higher in the previous session. "What is clearer is that the probability of a near-term deal has narrowed from our prior assessment of around 40% a few weeks ago," says Jorge Leon from Rystad Energy. "The direction of travel is now more uncertain, and the next few days will be critical in determining whether diplomacy can reassert itself or whether the conflict moves into a more sustained escalation cycle." Meanwhile, the latest EIA inventory data showed U.S. crude stockpiles continue to tighten, having fallen 7.2 million barrels last week.


--Gold prices continued to retreat as investors assess the U.S. monetary policy outlook. In early trading, New York futures fell 0.1% to $4,129.60 a troy ounce and were down more than 8% on the week. "While geopolitical uncertainty and central bank buying continue to offer longer-term support, near-term price direction is likely to remain closely tied to U.S. economic data, Treasury yields and expectations for Federal Reserve policy," analysts at ING say. After U.S. consumer prices rose at their fastest rate in three years in May, traders now await the release of PPI data later on Thursday.


Write to Barcelona Editors at barcelonaeditors@dowjones.com


(END) Dow Jones Newswires

06-11-26 0436ET