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(Bloomberg) — Renewed clashes in the Persian Gulf lifted oil prices while sending stocks and bonds lower, but both markets pared losses as data showed inflation accelerated by less than forecast despite a war-driven spike in energy costs.
Equities edged mildly lower in early New York trading on concern that tensions between the US and Iran could derail peace talks and prolong the closure of the Strait of Hormuz. Brent crude traded near $96, following a decline of more than 5% on Wednesday. Treasury 10-year yields hovered around 4.5%.
Inflation-adjusted consumer spending increased 0.1% last month, while the personal consumption expenditures price index rose 3.8% from a year earlier. The so-called core PCE index, which excludes food and energy items, was up 3.3% from a year earlier. Separate figures showed the economy expanded in the first quarter at a 1.6% annualized pace, slower than previously estimated.
Iran and the US accused each other of violating a fragile ceasefire in their three-month war, after Washington struck Iranian military targets for the second time this week. Ongoing negotiations via mediators are making progress, they say, although there’s little public sign of significant headway.
