Vance shares extend losses
Oil stocks fell as traders awaited confirmation that Iran will join the US in peace talks before the ceasefire expires, with the two sides still at odds on key issues.
Shares fell further after The New York Times reported that Vice President JD Vance’s diplomatic visit to Islamabad has been put on hold after Tehran failed to respond to US negotiating positions. Brent crude reached near $99. Treasury yields rose along with the dollar.
President Donald Trump said Tehran had “no choice” but to send a delegation to Pakistan. He told CNBC that the US is “ready” to resume bombing if there is no breakthrough. Parliament Speaker Mohammad Bagher Ghalibaf said Iran “will not accept negotiations under the shadow of threats.”
The standoff threatens to deepen the global energy crisis as flows through the vital Strait of Hormuz have come to a near standstill. And this is one of the unresolved issues, along with the nuclear capabilities of the Islamic Republic and Israel’s military campaign in Lebanon.
“Waiting for an all-clear signal to cash in is never a profitable strategy, but there are a lot of risks ahead,” said Chris Zaccarelli of Northlight Asset Management. “So there is no point in even going into a high-risk situation.”
Meanwhile, Kevin Wersh, Trump’s nominee to lead the central bank, said the Federal Reserve needs a new framework to deal with persistent inflation, without giving further details. He also said that the US President has not asked him to commit to taking certain rate decisions.
“The President has nominated me for this position and I will be an independent actor if confirmed as Chairman of the Federal Reserve,” Warsh said.
According to Michael Brown at Pepperstone, at first glance, “Warfare Fade” looks about as expected.
“In short, interest rates will again become the primary policy tool, with the balance sheet likely to play a secondary role, potentially even shrinking over time, although within an ‘adequate reserves’ regime that may make substantial shrinkage somewhat difficult,” he said.
Traders also analyzed the latest economic data. U.S. retail sales rose by the most in a year, showing that consumers continued to spend on a wide range of goods despite rising gasoline prices due to the war.
