Oil prices rebounded yesterday after a steeper-than-expected drop in US crude inventories, helping limit equity losses on Wall Street, while European stocks held near their highest in nearly two years.
European full-year earnings forecasts, set to be their best since 2010, and centrist Emmanuel Macron’s victory in France’s presidential election over the weekend have steadied European bourses so far this week.
The pan-European FTSEurofirst 300 index rose 0.05 per cent and MSCI’s gauge of stocks across the globe gained 0.05 per cent. MSCI’s All-Country World Index was flat at 459.42.
Oil prices rose after Saudi Arabia said it would cut supplies to Asia and US inventories fell more than expected. Brent crude was last up 2.6 per cent to $50.02 a barrel.
In the United States, disappointing results from Dow component Walt Disney and President Donald Trump’s firing of FBI Director James Comey has given equities some pause, but yesterday’s price action was hardly a selloff, investors said.
Mr Trump said he fired Mr Comey, who had been leading an investigation into the Trump 2016 campaign’s possible collusion with Russia, over his handling of the email scandal.
The Dow Jones Industrial Average fell 21.5 points, or 0.1 per cent, to 20,954.28, the S&P 500 lost 0.35 points, or 0.01 per cent, to 2,396.57 and the Nasdaq Composite dropped 9.06 points, or 0.15 per cent, to 6,111.53.
Traders said Mr Comey’s firing could lead to serious complications for the administration, but without a “smoking gun” that showed Mr Comey’s firing was motivated by something other than his handling of a probe into then-Democratic presidential nominee Hillary Clinton, there was likely to be limited market reaction.
Measures of market volatility are at rock-bottom. The US VIX index fell on Tuesday to 9.56, its lowest since late 2006.
The dollar fell 0.1 per cent against a basket of major currencies after slipping on the view that political uncertainty could derail Trump’s tax reform plans.
The yen, often sought in times of market uncertainty, was last 0.1 per cent higher at 113.92 to the dollar. The safe-haven Swiss franc rose against the dollar to a nearly one-month high.
Benchmark 10-year US Treasury yields were down 3.1 basis points to 2.38 per cent after retreating from five-week highs touched on Tuesday as investors made room in their portfolios for new issuance of government and corporate debt.
Gold rose 0.12 per cent to $1,222 an ounce.