Brent Crude Falls Below $76 as Trump Signals Possible Iran Talks, Easing Oil Shock Fears

Major U.S. stock benchmarks seesawed through the session on Wednesday, concluding nearly unchanged after the Federal Reserve held policy steady and Wall Street absorbed fresh geopolitical risks from the six‑day‑old Israel–Iran air war that has been pushing crude futures upward.

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The central bank’s widely expected decision to leave its target range intact came alongside a statement that still envisions two rate cuts in 2025 even as a growing minority of officials now anticipate none, and it nudged the projected pace of easing in 2026 and 2027 to a single quarter‑point each year.

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In his post‑meeting news conference Chair Jerome Powell warned that prices for consumer goods are likely to accelerate over the summer as President Donald Trump’s latest wave of import tariffs filters through supply chains, a remark that quelled an early rally in equities and reversed an earlier dip in Treasury yields.
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Before the statement the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite were all in firmly positive territory, but the Federal Open Market Committee’s caution and Powell’s inflation outlook erased most of those gains.
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By the closing bell the Dow slipped 0.10 percent, the S&P 500 eased 0.03 percent, and the tech‑heavy Nasdaq edged up 0.13 percent, underscoring the indecision that permeated the day’s trade.
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Energy producers paced sector laggards as Brent and West Texas Intermediate swung between red and green, eventually settling modestly higher at $76.70 and $75.14 a barrel, respectively, after having been down roughly two percent earlier and up more than four percent the previous day.
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Attention also remained fixed on Washington after Iranian Supreme Leader Ayatollah Ali Khamenei publicly rejected Trump’s call for unconditional surrender, prompting the President to declare his patience exhausted while refusing to say whether he will join Israel’s bombing campaign or pursue other options.
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Safe‑haven demand initially pushed Treasury prices higher, but yields rebounded during Powell’s remarks as traders digested his assertion that tariff‑fueled inflation could outpace any slowdown in services prices, leaving the benchmark ten‑year note virtually unchanged at 4.39 percent.
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A recently softer economic backdrop complicated the Fed’s deliberations; government figures Tuesday showed retail sales dropping 0.9 percent in May, the sharpest decline in four months, while Wednesday’s jobless‑claims report still pointed to waning labor‑market momentum even after a small weekly decline in new filings.
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Powell emphasized that the committee needs “greater confidence” that inflation is on a sustained downward path before cutting, adding that without the fresh duties he might already be easing, a remark analysts said positions the tariffs as the key wild card for monetary policy in the second half. Trading volume lagged the recent average, highlighting investors’ caution.
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Corporate standouts included Circle Internet, whose stock surged 33.8 percent after the Senate passed legislation setting ground rules for dollar‑pegged stablecoins, and steelmaker Nucor, up 3.3 percent after forecasting second‑quarter earnings above consensus amid sturdy construction demand.
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Analysts note that the Fed’s updated dot plot now shows wider dispersion, illustrating how uncertainty over trade policy, energy prices, and growth is dividing policymakers and could lead to more volatile markets as data roll in.
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Futures traders are pricing roughly 45 basis points of easing by December, down from about 65 basis points a month ago, reflecting skepticism that the hoped‑for disinflation will arrive quickly enough to free the Fed before year‑end.
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Several strategists warned that tariffs could temporarily lift headline inflation above four percent even if core services cool, delaying rate relief until early 2026 unless weaker consumer spending forces the Fed’s hand sooner.
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Others counter that a one‑time jump in goods prices may fade by autumn, especially if global growth slows and supply chains adapt, allowing at least one insurance cut ahead of the November election.
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What is clear, they say, is that policy now hinges less on traditional measures such as wage growth and more on the unpredictable trajectory of geopolitical tension and White House trade tactics. The next big catalysts include the June payrolls report, key readings on core personal‑consumption‑expenditures inflation, and any change in rhetoric from the

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White House about possible escalation or de‑escalation in the Middle East. Until then, traders appear resigned to day‑to‑day swings driven by headlines rather than fundamentals, a dynamic that Wednesday’s whipsaw session encapsulated perfectly.

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