MARKET WRAPS
Stocks:
European shares were mostly down Tuesday while oil prices rose on uncertainty over any Middle East peace deal.
Brent extended the previous session's gains, trading at around $89 a barrel, as talks to reopen the crucial Strait of Hormuz waterway hit an impasse.
President Trump said he would seek reparations for the Iran war after Tehran made its own demands for compensation as part of its conditions for reopening the strait.
"The pattern keeps repeating -- initial enthusiasm when negotiations appear promising, only for that optimism to dissipate just as quickly," ING said. "Yet the oil market remains very headline-driven, which leaves prices whipsawing."
U.S. Markets:
Stock futures were steady Tuesday as investors awaited the consumer price index for July to be released Wednesday.
Forex:
The euro fell. Realized volatility in the euro versus the dollar is likely to remain low in the near term, ING said.
The dollar traded steady. The greenback is at risk of falling given the lack of confidence in how the Federal Reserve will respond to the energy-price shock driven by the Middle East conflict, MUFG said.
Bonds:
The yields on eurozone government bonds were higher due to inflation concerns, as prospects of a near-term resolution to the U.S.-Iran war fade.
Treasury yields rose as negotiations to reopen the Strait of Hormuz appear to have stalled.
Energy:
Brent extended a four-day rally as tougher U.S. and Iranian demands slow progress toward an agreement that could resume normal shipping through the Strait of Hormuz, MUFG said.
In early European trading, Brent crude was up 2.1%, while WTI futures rose 2.2% after settling 5% higher on Monday.
Metals:
Gold prices were broadly flat as investors awaited upcoming U.S. inflation data for more cues on the U.S. interest-rate outlook after weaker-than-expected jobs data led markets to scale back bets for a September hike.
Gold chart
Comex gold futures' bullish setup remained intact, based on a daily chart, RHB Retail Research said. The relative strength index continued moving upward, reaffirming bullish momentum was in play.
Copper
Copper prices were higher in early trade, supported by tight near-term supply and expectations of constrained mine output. The market remains broadly bullish, driven by a weaker dollar and firm supply fundamentals, Baocheng Futures said.
Iron ore
Iron ore prices were higher in early trade amid potential supply disruptions. More workers have joined a strike at the Port Hedland iron ore export hub in Western Australia, ANZ Research said.
EMEA HEADLINES
Iran's Mysterious Ruler Signals a Hard Line on Trump With New Leadership
When the U.S. and Israel began airstrikes on Iran in February, the attacks killed Supreme Leader Ali Khamenei and almost his entire team of security chiefs, wiping out a generation of decisionmakers on military policy.
Now, the new supreme leader, Khamenei's son Mojtaba, is putting his own stamp on the country's national-security policy amid a confrontation with the U.S. that could last months or even years.
Gulf States Accept a New Normal in Hormuz: Iran Is in Control
DUBAI-Persian Gulf energy producers are concluding that Iran's control over the Strait of Hormuz will become permanent, disrupting their oil and gas exports and global energy supplies indefinitely.
The problem is they worry the alternative-going back to war-would be worse.
Why the Real Oil Squeeze Is Happening in Refineries
Oil prices are dominating headlines as geopolitical tensions strain the flow of crude through key global chokepoints. Yet the bigger squeeze in energy markets is unfolding further downstream in the world's refineries, where crude is converted into the fuels that power the global economy.
A series of disruptions-from the Iran war and Ukrainian attacks on Russian energy infrastructure to China's restrictions on fuel exports-has taken millions of barrels of refined products off global markets and left customers scrambling to locate alternative supplies.
Trump Shifts to Economic Pressure, Again, as Iran Won't Meet His Demands
WASHINGTON-President Trump has settled on an old strategy in hopes of a new result in the Iran war, U.S. officials said: economic pressure.
Reluctant to resume all-out war and wary of diplomatic negotiations, Trump has adopted a wait-and-see approach that would give financial sanctions and a U.S. naval blockade of Iranian ports more time to inflict economic harm, U.S. officials said.
GLOBAL NEWS
Gulf States Accept a New Normal in Hormuz: Iran Is in Control
DUBAI-Persian Gulf energy producers are concluding that Iran's control over the Strait of Hormuz will become permanent, disrupting their oil and gas exports and global energy supplies indefinitely.
The problem is they worry the alternative-going back to war-would be worse.
Why the Real Oil Squeeze Is Happening in Refineries
Oil prices are dominating headlines as geopolitical tensions strain the flow of crude through key global chokepoints. Yet the bigger squeeze in energy markets is unfolding further downstream in the world's refineries, where crude is converted into the fuels that power the global economy.
A series of disruptions-from the Iran war and Ukrainian attacks on Russian energy infrastructure to China's restrictions on fuel exports-has taken millions of barrels of refined products off global markets and left customers scrambling to locate alternative supplies.
Trump Shifts to Economic Pressure, Again, as Iran Won't Meet His Demands
WASHINGTON-President Trump has settled on an old strategy in hopes of a new result in the Iran war, U.S. officials said: economic pressure.
Reluctant to resume all-out war and wary of diplomatic negotiations, Trump has adopted a wait-and-see approach that would give financial sanctions and a U.S. naval blockade of Iranian ports more time to inflict economic harm, U.S. officials said.
Trump Signs Order to Reduce Childhood Vaccines, Repeats Unfounded Autism Link
WASHINGTON-President Trump signed a new executive order Monday calling for most children to receive fewer vaccines and made some of his most extensive comments yet linking childhood shots and autism-a connection that scientists have said is unfounded.
The document Trump signed Monday is similar to a previous executive order to decrease the number of vaccines children receive. It also urges parents to spread out vaccines in more visits to pediatricians' offices and encourages states to mandate fewer vaccines for school attendance. It calls for the measles, mumps and rubella vaccination to be given in separate shots rather than the combination shot commonly given in the U.S.
Earthquake Hits Colombia Days After New President Takes Reins
BOGOTÁ, Colombia-A 7.4-magnitude earthquake struck Colombia on Monday, killing 111 people and trapping dozens more under collapsed buildings in an early challenge to a president who was sworn in on Friday.
President Abelardo de la Espriella said from Colombia's disaster management agency in Bogotá, the capital, that in addition to the dead, 87 people had been reported injured and 61 buildings had collapsed. Authorities said the death count could rise because an unknown number of people were trapped under rubble after the quake hit at 7:34 a.m. local time. The epicenter was in San José del Palmar, in the northern province of Chocó, with the damage particularly heavy in a half dozen or so cities in Colombia's western mountains.
State Election Officials Tighten Up Voter Rolls Ahead of Showdown With Trump
In President Trump's prime-time address last month declaring U.S. elections vulnerable, his centerpiece claim was that more than 250,000 noncitizens were registered to vote. A day later, the Department of Homeland Security said the striking number covered just four states.
New Jersey Gov. Mikie Sherrill already knew her state had a problem but nothing of that scale. The day before Trump's speech, the Democrat learned from her state attorney general's office that under the previous governor, the state had accidentally put thousands of noncitizens on its voter rolls. Even worse, hundreds of them appeared to have cast ballots. The governor and her advisers quickly realized they needed to acknowledge the errors.
Write to priscila.barrera@wsj.com