By Rae Wee SINGAPORE, March 24 (Reuters) - Asian stocks rallied, oil prices nursed losses and the dollar wobbled on Tuesday after U.S. President Donald Trump postponed the bombing of Iran's power grid
Stocks slip, with oil prices higher as war uncertainty is high
Market Reactions Amid Ongoing U.S.-Israeli War on Iran
By Caroline Valetkevitch and Amanda Cooper
Wall Street Performance and Oil Price Movements
NEW YORK/LONDON, March 24 (Reuters) - Wall Street stock indexes eased on Tuesday and oil prices extended recent sharp gains as worries persisted over how long the U.S.-Israeli war on Iran will go on, even as President Donald Trump said the U.S. was talking to "the right people" in Iran to reach an agreement to end hostilities.
U.S. Diplomatic and Military Actions
Washington has sent a 15-point proposal to Iran aimed at ending the war in the Middle East, Reuters and other media in the U.S. and Israel reported on Tuesday after markets closed. Earlier, two people familiar with the matter told Reuters the Pentagon is expected to send thousands of soldiers from the U.S. Army's elite 82nd Airborne Division to the Middle East, adding to a big U.S. military buildup.
Market Sentiment and Analyst Insights
"There's still a lot of confusion and lack of clarity about Iran and how long the military operations will last and what the consequences for oil and global trade are. That's the key driver," said Oliver Pursche, senior vice president and advisor at Wealthspire Advisors.
"Today we're seeing a little bit more negative sentiment seep back into markets," he said.
Major Index Movements
The Dow Jones Industrial Average fell 84.41 points, or 0.18%, to 46,124.06, the S&P 500 fell 24.63 points, or 0.37%, to 6,556.37 and the Nasdaq Composite fell 184.86 points, or 0.84%, to 21,761.89.
U.S. Treasury yields added to gains after a weak auction of 2-year Treasury notes, and the dollar regained lost ground.
Global Market and Commodity Reactions
Oil and Energy Market Impact
Stocks had rallied on Monday after Trump said he had ordered the military to postpone strikes against Iranian power plants following "productive conversations" with Tehran. Iran has denied talks with the United States.
Brent futures settled higher at $104.49 a barrel. U.S. West Texas Intermediate climbed 4.79%, to $92.35. [O/R]
With the war raging and shipments of about one-fifth of the world's oil and liquefied natural gas through the Strait of Hormuz curtailed, oil prices were expected to stay high.
Sector and International Index Performance
Communication services and technology were among the day's biggest percentage declining sectors in the S&P 500.
MSCI's gauge of stocks across the globe rose 0.91 points, or 0.09%, to 985.82.
The pan-European STOXX 600 index rose 0.43%.
Economic Data and Central Bank Responses
Euro Zone and Inflation Concerns
Earlier, data showed euro zone private sector growth nearly stalled this month as inflation expectations surged and delivery times soared, adding to mounting evidence the bloc is already suffering a tangible drag from the U.S. and Israeli war on Iran.
The risk of persistent inflation arising from the escalating war with Iran was strong enough to convince Fed Governor Christopher Waller to switch his support to keeping interest rates on hold from cutting them, he said last week, as market expectations for the U.S. central bank's next move shifted toward a hike in borrowing costs.
Currency and Treasury Market Updates
In Treasuries, the yield on benchmark U.S. 10-year notes rose 2 basis points to 4.356%, from 4.336% late on Monday.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.06% to 99.24, with the euro down 0.09% at $1.1602.Against the Japanese yen, the dollar strengthened 0.18% to 158.72.
Spot gold rose 1.34% to $4,464.66 an ounce.
Reporting Credits
(Reporting by Caroline Valetkevitch in New York and Amanda Cooper in London; Additional reporting by Dhara Ranasinghe, in London and Rae Wee in Singapore; Editing by Arun Koyyur, Chris Reese and Lincoln Feast.)
