Stocks rise, oil jittery as mooted Trump Iran ceasefire tested

U.S. stock futures rose, while the dollar wavered and oil prices edged up on Wednesday, after reports of gunfire attacks on container ships in the Strait of Hormuz immediately tested President Donald Trump's unilateral declaration of an Iran ceasefire extension. Brent crude futures were up 73 cents, or 0.7%, at $99.15 a barrel while West Texas Intermediate futures were up 59 cents, or 0.7%, to $90.2, after at least three container ships were hit by gunfire in the Strait which has become a flashpoint in the ongoing conflict. It was not clear whether Trump's announcement of an indefinite pause in hostilities would be backed by U.S. ally Israel or Iran, which had already rejected a second round of negotiations. S&P futures rose 0.5% while Nasdaq futures gained 0.7%. Europe's benchmark STOXX index was flat, while MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.5% after hitting a seven-week high on Tuesday. Bond yields barely moved, as investors held off making big bets while waiting for more concrete signs as to whether the simmering tensions in the Middle East were headed for a near-term resolution or likely to keep building. HORMUZ REMAINS KEY Although the war caused a sharp selloff in March, equity markets across the globe have rebounded this month to pre-war levels as the prospect of a peace deal and the ceasefire spurred a risk-on rally. That has also left the U.S. dollar, which benefited from safe haven demand in March, on the back foot, giving up most of its war-induced gains. "It appears markets were right to assume peak war uncertainty is behind us," said Matt Simpson, a senior market analyst at StoneX. "Risk seems likely to remain buoyant and dips viewed favourably by equity bulls. The closure of the Strait of Hormuz is already priced in." The dollar index, which measures the U.S. currency against six others, was last at 98.33. Although it is hovering near its highest in a week, it is down 1.5% in April after rising about 2.3% in March. Trump said he would continue the U.S. Navy's blockade of Iran's ports and shores. While oil prices have come down from their March peaks they are still well above pre-war levels, worrying investors that elevated energy prices could quicken inflation and keep global interest rates higher for longer. WARSH SENATE APPEARANCE Investors parsed comments from Federal Reserve chief nominee Kevin Warsh as he tried to assure U.S. senators considering his confirmation to lead the central bank that he ​would act independently of the White House. Warsh said he had made no promises to Trump about cutting rates and called for a new approach to controlling inflation and a communications overhaul that could discourage his colleagues from saying too much about the direction of monetary policy. Separately, data on Tuesday showed U.S. retail sales rose more than expected in March as the war with Iran boosted gasoline prices and led to a record surge in receipts at service stations, while tax refunds underpinned spending elsewhere.