Shares trade near record highs, crude prices gain nudged by Middle East ceasefire

By Chibuike Oguh

NEW YORK (Reuters) -Global shares traded near record highs on Wednesday while crude oil prices were on track to snap three straight sessions of declines as Middle East tensions eased, allowing markets to focus on U.S. inflation and prospects of an interest rate cut.

A ceasefire between Israel and Iran appeared to be holding, further reducing the risks of disruptions to the global oil trade. At a NATO summit on Wednesday, President Donald Trump basked in the quick end to the 12-day conflict, saying he now expected a relationship with Iran that would preclude rebuilding its nuclear program.

Federal Reserve Chair Jerome Powell resumes two days of Congressional testimony on Wednesday when he appears before the Senate Banking Committee after scrutiny before a House panel on Tuesday.

Benchmark S&P 500 and Nasdaq were hovering near a fresh record high, helped by gains in technology and communication services shares. The Dow was trading lower. The Dow Jones Industrial Average fell 0.26% to 42,975.59, the S&P 500 rose 0.02% to 6,093.15 and the Nasdaq Composite rose 0.31% to 19,973.69. 

European shares turned lower, dropping 0.72%.

MSCI's broadest index of Asia-Pacific shares outside Japan finished up 0.85% overnight. MSCI's gauge of stocks across the globe eased 0.08% to 902.34, after hitting a record high earlier in the session.

"It looks like we've got a bit of a tug of war as to everything from Middle East tensions to how that's going to impact inflation, and then you've got oil prices firming up a little bit," said Sandy Villere, portfolio manager at Villere & Co in New Orleans.

"It would be interesting if oil gets weaker and inflation stays at bay and then you wrap all that into what Powell has been saying. It feels like the market is being pretty resilient."

CRUDE FUTURES UP

Brent crude futures were up 1.52% at $68.16 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 was up 1.58%, to $65.39. Prices plunged more than 10% over the two sessions having rallied to five-month highs after the U.S. attacked Iran's nuclear facilities over the weekend.

Powell is expected to deliver the same message he presented to the House panel that even with recent inflation more moderate than expected, the Fed expects rising import taxes will lead to higher consumer prices beginning this summer when it will start considering raising interest rates.

The yield on benchmark U.S. 10-year notes rose 2.5 basis points to 4.318%.

The U.S. dollar gained against the safe-haven Japanese yen and the Swiss franc but lost ground against the euro.

The dollar strengthened 0.46% to 145.57 against the Japanese yen and was up 0.01% to 0.805 against the Swiss franc. The euro rose 0.15% at $1.1625.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0% to 97.95.

Gold prices were mixed. Spot gold rose 0.01% to $3,323.99 an ounce. U.S. gold futures fell 0.07% to $3,315.00 an ounce.

(Reporting by Chibuike Oguh in New York; additional reporting by Kevin Buckland in Tokyo and Linda Pasquini in Gdansk; editing by Mark Heinrich, Nick Zieminski and Ed Osmond)