Oil prices fall further on Mideast deal, but Fed outlook knocks equities

Oil prices dropped further on Thursday after US President Donald Trump and his Iranian counterpart signed off on a deal to end four months of war and reopen the Strait of Hormuz to tanker and cargo traffic.

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Wall Street was cautiously in the green around a half hour into trading, with the Dow, the broader-based S&P 500 and the tech-heavy Nasdaq up just above 0.5 percent.

That followed steep falls the previous session after the US Federal Reserve raised its inflation forecast and projected higher US interest rates this year, boosting the dollar.

“Politics and economics are front and centre for markets,” said Russ Mould, investment director at AJ Bell.

“The US and Iran have signed an initial deal to end the war, causing oil prices to fall further,” he said.

But the Fed’s hint at a rate increase “took the market by surprise and caused a wobble” on Wall Street and elsewhere, he added.