Stocks rise ahead of US-China summit

TDT | London

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Stock markets drifted higher Wednesday as investors awaited a high-stakes summit between the United States and China, while oil prices diverged as Middle East peace talks stalled.

Oil prices surged earlier this week on signs that no breakthrough was in sight to resume crucial Gulf tanker and cargo traffic through the Strait of Hormuz, paralysed by the Middle East war.

The International Energy Agency warned that countries were tapping into oil inventories and strategic reserves at a "record pace", meaning further price volatility was likely.

Following surges for equities worldwide on the back of solid corporate earnings and hopes for a swift end to the Mideast conflict, investors were content to hunker down.

Wall Street indexes traded little changed after several weeks of hitting record highs despite the geopolitical turbulence, while Europe's main equity markets made modest gains.

"There is a calmer tone to markets on Wednesday," said Kathleen Brooks, research director at trading group XTB, adding that markets were boosted by a "no news is good news" approach.

Investors also digested sharply higher US inflation data. Wholesale prices rose 6.0% for the 12 months ending in April, according to US Department of Labor data.

Month-on-month increases greatly exceeded expectations and were at their highest level since March 2022.