Markets React: Oil Gains Amid Strait of Hormuz Tensions and Inflation Uncertainty

Oil prices increased on Tuesday due to diminishing hopes for a resolution to shipping bottlenecks in the Strait of Hormuz, while a red-hot rally in chip stocks cooled and investors awaited U.S. inflation data for April. The ongoing tension between the U.S. and Iran contributed to uncertainty.

In Europe, the STOXX 600 index declined, and U.S. stock futures also fell amid these geopolitical tensions. The Brent crude futures rose by 2% to $106.4 per barrel, with Deutsche Bank strategists pointing to persistent disruptions. The market kept a close watch on President Trump's upcoming visit to China for potential developments on trade issues.

Ahead of the U.S. inflation report expected to show a 3.7% year-on-year increase in consumer prices, global bond yields rose. Concerns over UK political stability led to a rise in gilt yields, while the dollar strengthened against major currencies.

(With inputs from agencies.)