SerpApi.Org
By Gregor Stuart Hunter and Johann M Cherian
July 22 (Reuters) - Global stocks rose on Wednesday, lifted by energy shares, after crude prices hit six-week highs, while U.S. equity futures fell ahead of key earnings from U.S. Big Tech and the dollar dipped against other major currencies.
Traders also kept a wary eye on the Japanese yen that nudged higher after sources told Reuters that the Bank of Japan was on alert to upside inflation risks that could lead to faster interest rate hikes than markets project.
Two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea on Tuesday following threats of attack from Yemen's Iran-aligned Houthis, dampening hopes that the end to the recent spike in tensions could be imminent, which sent Brent crude prices up 3.5% to $94.22 a barrel - their highest since early June.
President Donald Trump said all generic drugs brought into the U.S. will carry a tariff of 0% for two years from August 1, after which the rate will rise to 100% for one year and 200% thereafter. He slapped a 50% tariff on some Canadian goods earlier this week.
The MSCI All-World index was last up 0.1% on the day, while in Europe, oil and gas stocks helped send the STOXX 600 up 0.6%. By contrast, futures on the tech-heavy Nasdaq slipped 0.6% and those on the S&P 500 were down 0.2%.
Market focus will turn to earnings after Wednesday's closing bell from Alphabet, which is facing heightened scrutiny over the delayed launch of a key AI model, and Tesla, which is widely expected to report its first quarterly cash burn in over two years.
"Even the slightest doubt about the monetization of artificial intelligence or the return on infrastructure spending could call into question the main driver of the market rally over the past nearly two years," said John Plassard, head of investment strategy at Cité Gestion.
YEN BOUNCES OFF 40-YEAR LOWS
The Japanese currency found its footing at 162.98 per dollar after hitting a new 40-year low on Tuesday as investors weighed the measures officials would use to shore up the drooping currency.
Japanese Finance Minister Satsuki Katayama said on Wednesday that the government remains ready to take "decisive action" in currency markets if needed, while refraining from commenting on specific foreign-exchange levels.
The battered yen and soaring oil prices pushed Japan's imports to a record high in June, though exports also topped expectations, helped by booming demand from AI-related data centres - and a weak currency that continues to boost overseas sales.
The jump in oil prices is complicating the work of central bankers who have also grown cautious in offering an outlook for monetary policy. The European Central Bank is expected to announce its verdict on Thursday, and the U.S. Federal Reserve's decision is due next week.
Both central banks are expected to leave borrowing costs on hold this month, but traders expect borrowing costs in the U.S. and the euro zone to rise by at least 25 basis points each by the end of the year, LSEG-compiled data showed.
The yield on the U.S. 10-year Treasury note was at 4.63%, unchanged on the day, after having touched a two-month high in the previous session. Gold rose 1.1% to a two-week high and was last at $4,120 an ounce.
(Reporting by Gregor Stuart Hunter and Johann M Cherian; Editing by Christopher Cushing, Sam Holmes, Amanda Cooper and Anil D'Silva)
