MARKETS ALL – Oil rises, stocks fall on Iran worries, earnings focus after Fed

* Wall Street choppy, dollar rises after Fed holds rates steady

* The Fed shows three opponents to reducing interest rates, one opponent favors cuts now

* Microsoft, Alphabet, Amazon and Meta should lead

* Oil prices rally on fears of extended US sanctions on Iran

NEW YORK/PARIS, April 29 (Reuters) – Oil prices rose on worries about long-term supply disruptions due to the Middle East war while Wall Street stocks pared earlier losses in choppy trading after a divided Federal Reserve kept rates on hold and investors looked cautiously ahead of cash outflows from US megacap technology companies.

US crude gained 6.95%, or $6.95, to $106.88 a barrel while Brent gained 6.08%, or $6.77, to $118.03 after touching its highest point since June 2022, with little sign of a two-month resolution against the US on Iran. Hormuz. A White House official said on Wednesday that US President Donald Trump asked US oil companies for ways to reduce the impact of the US blockade that could last for several months on Iran’s ports. Meanwhile, in the first official estimate of the military cost of the Iran conflict, a top Pentagon official said Wednesday the war has cost $25 billion so far. The S&P 500 was close after the Fed noted growing concerns about inflation while drawing three objections from officials who no longer felt the US central bank should be more aggressive in lowering borrowing costs in its most divisive decision since 1992. The fourth opposition at the meeting agreed to a 25-point reduction.

Trump nominee Kevin Warsh is expected to replace Jerome Powell as chairman in the coming weeks amid an unprecedented effort by the White House to control the world’s most powerful bank.

Chris Grisanti, chief market strategist at Mai Capital Management, said he saw the opposition as “firing Fed Chairman Kevin Warsh, who has been a proponent of tapering.”

“They did not oppose the decision of the level, but to reduce the bias in the statement. This serves two purposes: On its face, it is more hawkish, and it says that we may no longer depend on the reduction, so new news,” said Grisanti.

Powell said in a press conference that although he opposed votes against holding interest rates that reduce bias, he does not believe that officials are dependent on interest rates.

US stock indexes were already reeling ahead of the meeting as investors awaited earnings reports from market heavyweights Microsoft, Alphabet, Amazon, and Meta, due later in the day. On Wall Street at 3:07 p.m., the Dow Jones Industrial Average was down 326.44 points, or 0.66%, to 48,816.71, the S&P 500 was down 12.36 points, or 0.17%, to 7,126.36 and the Nasdaq Composite was down 2%, or 29. 24,635.17.

MSCI’s global average fell 3.35 points, or 0.31%, to 1,065.63. Earlier, the pan-European STOXX 600 index closed down 0.6% on mixed corporate results and data pointing to economic damage caused by the Iran war.

BOND YIELDS, DOLLAR RISE US Treasury yields higher after Fed update.

The yield on the benchmark US 10-year note rose 5.6 basis points to 4.408%, from 4.354% late on Tuesday while the 30-year bond yield rose 3.7 basis points to 4.9813%.

The yield on the 2-year note, which usually moves in line with the Federal Reserve’s expected interest rate, rose 8.2 basis points to 3.926%.

In foreign exchange markets, the dollar rose against major currencies after the Fed’s review while markets were also on edge over the US-Israel war with Iran.

The dollar strengthened 0.47% to 160.36 yen, putting it close to levels that have previously triggered intervention, despite the Bank of Japan signaling after its policy meeting on Tuesday that it may raise rates in the coming months.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.4% to 98.98, while the euro was down 0.36% at $1.1669.

Among precious metals, gold was on track for its third straight day of decline after hitting its lowest level since March 31. Spot gold fell 1.19% to $4,539.85 an ounce. (Reporting by Sinéad Carew, Laura Matthews, Elizabeth Howcroft, Gregor Stuart Hunter. Editing by Hugh Lawson, Kirsten Donovan and Nick Zieminski)

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