US stock markets moved higher on Wednesday as investors reacted to encouraging inflation data. The Producer Price Index (PPI) for June fell 0.3% month-on-month, following a consumer price report that also showed inflation rising less than anticipated. These figures have eased concerns that the Federal Reserve might need to raise interest rates, providing a lift to major technology stocks like Apple, Amazon, and Meta, which saw gains of 3% or more. The S&P 500 rose 0.4%, reflecting a broader sense of relief across Wall Street.
Despite the positive economic news, geopolitical instability continues to weigh on global markets. The United States has resumed military strikes against Iran, leading to renewed fears regarding the security of the Strait of Hormuz. This narrow waterway is a critical transit point for global oil and gas supplies, and its potential closure has caused oil prices to tick upward. The ongoing conflict has also forced international airlines to maintain flight suspensions or operate reduced schedules in the Middle East, as aviation authorities warn of risks to civil aircraft.
In other economic developments, India has adjusted its windfall taxes on fuel exports. Effective July 16, the export duty on diesel was raised to 15.5 rupees per litre, while the levy on aviation turbine fuel was increased to 14.5 rupees per litre. These adjustments are designed to capture revenue from energy producers benefiting from high international prices while ensuring sufficient domestic fuel supplies. Meanwhile, Russia has reportedly sought gasoline imports from India to address domestic shortages caused by recent Ukrainian drone strikes on its oil refineries, marking an unusual shift in global energy trade patterns.