Oil Prices Steady as Global Stocks Waver

• Treasury yields tick lower • Chinese stocks drop • Oil prices edge lower Global stocks wobbled amid heightened tensions in the Middle East and after China’s central bank disappointed market hopes for a bigger stimulus.

The Stoxx Europe 600 edged down 0.1% in morning trade after a downbeat session in Asia. The Shanghai Composite dropped 1.7% and Hong Kong’s Hang Seng fell 1.5%. U.S. officials believe Iran was responsible for attacks on major Saudi Arabian oil-production facilities, and shared intelligence on the matter with the kingdom. Brent crude, the global oil benchmark, dropped 0.3% Tuesday to $68.83 a barrel. But the downward move did little to dent a historic rally in prices following damage to Saudi oil facilities as investors tried to calculate the likely impact on global supplies. Meanwhile, the People’s Bank of China remained restrained in its response to a spate of weak economic data in recent months. The central bank on Tuesday disappointed economists who had hoped it would move to effectively lower interest rates, though it did take steps to inject 200 billion yuan ($28.3 billion) into the banking system.

Despite the gloom, Japan’s Nikkei edged up 0.1% as President

Trump

moved ahead with a partial commerce deal with the country on areas such as digital technology and agriculture. The step should see some tariffs on Japanese imports to the U.S. lowered. Europe, however, was braced for fresh tariffs from Washington, over a long-running battle over aircraft maker subsidies. Gold, the traditional haven, was down 0.4% after climbing Monday amid the rising geopolitical tensions. The Federal Reserve later Tuesday will release August’s industrial production figures, an important measure of how U.S. manufacturing has held up amid a slowdown in global trade. Factory output fell 0.4% in July from the previous month.

Traders work on the floor of the New York Stock Exchange on Sept. 16.

Photo:

Spencer Platt/Getty Images

Market expectations were set for another quarter percentage point interest-rate cut from the Fed on Wednesday, but there will also be scrutiny of how recent developments with Saudi Arabia, and on trade with China, might influence future policy. Mr. Trump on Monday called for a rate cut after the attacks in Saudi Arabia. In currencies, the British pound may face another day of volatility as the U.K’s Supreme Court examines the legal basis for Prime Minister

Boris Johnson

’s decision to suspend Parliament amid Brexit tensions. The pound was recently down 0.1% against the U.S. dollar. The U.S. 10-year Treasury yield fell to 1.820%, from 1.843% Monday. Bond yields fall as prices rise. Write to Anna Isaac at anna.isaac@wsj.com

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