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Crude oil hovers near multi-week lows as supply worries

recede

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US stock futures flat after rally on Wall Street overnight

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Two-year Treasury yields at fresh multi-week low

By Kevin Buckland

TOKYO, June 25 (Reuters) - Stocks ticked higher and

crude oil held not far from multi-week lows on Wednesday, as

investors took a ceasefire between Israel and Iran as a green

light to head back into riskier assets and cast aside immediate

worries about an energy shock.

The dollar languished close to an almost four-year low

versus the euro, with two-year U.S. Treasury yields sagging to

1-1/2-month troughs as lower oil prices reduced the risk to

bonds from an inflation spike.

The shaky truce has so far held, although Israel says it

will respond forcefully to Iranian missile strikes that came

after U.S. President Donald Trump announced an end to the

hostilities.

In addition, U.S. airstrikes did not destroy Iran's nuclear

capability and only set it back by a few months, according to a

preliminary U.S. intelligence assessment, contradicting Trump's

earlier comments that Iran's nuclear programme had been

"obliterated".

Europe's Stoxx 600 index edged up 0.2% in early trade, while

S&P 500 futures and Nasdaq futures were flat.

Japan's Nikkei rose 0.4%, while Hong Kong's Hang

Seng climbed 1.3% and mainland Chinese blue chips

gained 1.44%, closing at their highest level since

March 20.

An MSCI index of global stocks held steady

after pushing to a record high overnight.

"If the still tense situation in the Middle East does indeed

continue to calm down, the stock markets could have a pleasant

July ahead of them, in line with their typical seasonal

pattern," analysts at Frankfurt-based Metzler said.

"This would result in new all-time highs in the U.S.,

possibly further fuelled by renewed expectations of interest

rate cuts by the Fed."

A series of U.S. macroeconomic data released overnight

including on consumer confidence showed possibly weaker than

expected economic growth in the world's largest oil consumer,

bolstering expectations of Federal Reserve rate cuts this year.

Brent crude rose 2% to $68.43 per barrel, bouncing a

bit following a plunge of as much as $14.58 over the previous

two sessions. U.S. West Texas Intermediate crude was up

as much to trade at $65.60 per barrel.

"While concerns regarding Middle Eastern supply have

diminished for now, they have not entirely disappeared, and

there remains a stronger demand for immediate supply," analysts

at ING wrote in a note to clients.

The two-year U.S. Treasury yield was at its

lowest since May 8 at 3.7848%.

The euro slipped 0.1% to $1.1594, still close to

the overnight high of $1.1641, a level not seen since October

2021, while the U.S. dollar index, which measures the

currency against six major counterparts, was only slightly

higher at 98.079.

Gold rose marginally to about $3,328 per ounce.

Aside from geopolitics, U.S. monetary policy continues to

dominate investor concerns.

Federal Reserve Chair Jerome Powell said on Tuesday that

higher tariffs could begin raising inflation this summer, a

period that will be key to the U.S. central bank considering

possible rate cuts.

Markets continue to price in a roughly 19% chance that the

Fed will cut rates by a quarter point in July, according to the

CME FedWatch tool.