Oil prices rally as global stocks retreat

By Chris Prentice and Amanda Cooper

NEW YORK/LONDON, Aug 14 (Reuters) - U.S. and European shares fell connected Friday and lipid prices gained arsenic markets monitored tense U.S.-Iran talks and digested caller information that dented expectations for a Federal Reserve complaint hike ‌next month.

Faltering talks to extremity the Iran warfare near lipid and state prices poised for sizeable play gains. The U.S. threatened ‌to ramp up economical unit connected Iran, including extending a naval blockade.

U.S. user sentiment deteriorated successful aboriginal August amid the rising outgo of surviving due to the fact that of the Middle East ​conflict, a survey showed connected Friday.

The U.S. dollar and yields connected U.S. Treasuries fell connected a astonishment driblet successful U.S. retail sales. The information further reduced expectations of a Federal Reserve complaint hike astatine adjacent month's meeting.

The weaker dollar supported golden prices.

On Wall Street, the Dow Jones Industrial Average fell 85.82 points, oregon 0.16%, to 53,754.17, the S&P 500 fell 10.76 points, oregon 0.14%, to 7,788.23 and the Nasdaq Composite fell 92.60 points, oregon 0.34%, ‌to 26,710.43.

In Europe, the STOXX 600 gauge retreated 0.24% ⁠as losses successful the tech assemblage were broadly offset by gains successful capital-intensive shares specified arsenic defence and automakers.

Focus remains connected the wide AI taxable successful the aftermath of beardown net that person helped soothe capitalist worries astir ⁠massive AI spending.

The MSCI All-World index, which is up for a 3rd consecutive week, reversed earlier gains and fell 0.26 points, oregon 0.02%, to 1,160.54.

MSCI's broadest scale of Asia-Pacific shares extracurricular Japan closed higher by 0.29% to 1,640.08.

GEOPOLITICAL RISK

"The markets circular retired the week connected a affirmative note, with comparatively bladed lawsuit ​risk connected ​the economical and firm calendar. But of course, it's a Friday, and the ​typical signifier has been for geopolitical risks, oregon astatine ‌least bombastic rhetoric, to prime up betwixt the U.S. and Iran going into the weekend," Capital.com strategist Kyle Rodda said.

"Currently, the geopolitical uncertainty remains the lone large macro roadblock to a marketplace experiencing beardown tailwinds from net and the monetary argumentation outlook."

Brent crude futures roseate to $87.68 per barrel, up 0.7% connected the day, and U.S. lipid prices roseate 0.3% to $81.49.

John Sidawi, elder portfolio manager for fixed income astatine Federated Hermes, said a puzzling diagnostic of markets successful caller months has been the increasing disconnect betwixt geopolitical uncertainty and plus terms volatility.

"For now, markets look consenting to ‌tolerate a important magnitude of uncertainty without demanding higher hazard premiums. However, this equilibrium ​is improbable to beryllium permanent," Sidawi said.