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Tadawul Shares Close Wednesday Lower Ahead of Saudi April Inflation Data

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The Tadawul All Share Index closed on Wednesday 0.17% lower as market watchers await Saudi Arabia's latest inflation print on Thursday, as well as the outcome of the US visit to China.

US President Donald Trump is set to meet his Chinese counterpart, Xi Jinping, at a two-day summit in Beijing, China. The meeting will focus on Trump's request to "open up" the Asian nation to American businesses.

"The premise for the meeting between the leaders of the US and China has changed on multiple fronts since Trump and Xi agreed on a trade war truce in Busan last October," Danske Bank said in a note. "The countries could agree on China increasing purchases of US agricultural goods, an extended tariff truce and establishment of mutual trade and investment 'boards', though these should be seen as largely symbolical. Change in the wording of US policy on Taiwan would be a major victory for China."

Dampening sentiment during the session, the Saudi Air Force reportedly launched retaliatory attacks on Iran. The strikes were reportedly followed by diplomatic talks to de-escalate the situation, Reuters reported, citing Iranian and Western officials.

On the corporate front, Advanced Building Industries (SASE:2240), d/b/a Senaat, ticked up 1.34% as its Advance Construction Solutions Co. for Projects, or Zodcon, unit secured a 20-month project to develop a multi-purpose facility for the TKE Alat Manufacturing Co. joint venture.

Meanwhile, Almasane Alkobra Mining (SASE:1322), d/b/a Amak, restarted the operations of its Al Masane plant after a 16-week operations halt. The facility processes base metals, zinc, and copper concentrates. Shares of the mining company closed 0.62% in the red.

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Asia Markets

US Equity Indexes Mixed as Hot Inflation Print Hits Technology, Iran Deadlock Continues

US equity indexes traded mixed on Tuesday as a hotter-than-expected inflation print amid soaring gas prices restrained growth sectors, while the Iran stalemate continued.The Nasdaq fell 0.7% to 26,088.20, and the S&P 500 declined 0.2% to 7,400.96. Both gauges ended off session lows. The Dow Jones Industrial Average rose 0.1% to 49,760.56, clawing back all declines from earlier in the day. Technology and consumer discretionary sectors led decliners. Health care and consumer staples were among the top gainers.The US seasonally adjusted consumer price index jumped by 3.8% year-over-year in April from 3.3% in the prior month, according to data released Tuesday by the Bureau of Labor Statistics, compared with the 3.7% consensus. Core CPI, which excludes food and energy prices, climbed by 2.8% annually from 2.6%, versus expectations for 2.7%.The CPI increased 0.6% month-over-month, as expected, following a 0.9% increase in March. Core CPI gained 0.4%, above the 0.3% consensus and 0.2% a month ago.Gasoline prices rose a further 5.4% in April following a gain of more than 21% in March due primarily to the ongoing closure of the Strait of Hormuz, the choke point for about a fifth of global crude oil flows, according to a Jefferies note."Jointly in March/April the gasoline price rise equates to the largest two-month change [non-seasonally adjusted] on record with data back to 1935," David Doyle, head of economics at Macquarie, said in a note. "As we have been highlighting for some time, we see the next move as a hike with our baseline timing being in 1H27."Federal Reserve Bank of Chicago President Austan Goolsbee said inflation readings show pervasive price pressures in the US economy and may even indicate overheating, Bloomberg News cited NPR."If you look at the components that are not energy, like services, if that is an indication that the underlying economy is overheating, then the Fed has got to be thinking about how do we break the chain of escalating inflation," Goolsbee was cited as saying Tuesday.US Treasury yields jumped, with the 10-year up 5.1 basis points to 4.46%, the highest since about July. The two-year rate advanced 4.4 basis points to almost 3.99%, the strongest since June.West Texas Intermediate crude oil futures surged 4.3% to $102.30, and Brent crude futures increased 3.3% to $107.68 as a faltering ceasefire between the US and Iran kept the Strait of Hormuz closed, continuing the largest-ever energy supply shock."Oil prices climbed ... as the global oil market continued to tighten amid limited prospects for a reopening of the Strait of Hormuz," Saxo Bank wrote in a note. "The move followed Trump casting doubt over a ceasefire, with Israel signalling the war is not over."Britain said on Tuesday it would contribute autonomous mine-hunting equipment, Typhoon fighter jets, and the warship HMS Dragon to a multinational defensive mission aimed at securing shipping in the Strait of Hormuz, Reuters reported. Defence minister John Healey announced the commitment during a virtual summit with more than 40 of his counterparts from other nations involved in the mission, which he said would become operational when conditions allowed, the news report saidIn precious metals, gold futures slipped 0.2% to $4,720.1, while silver futures climbed 1.5% to $87.19.

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Asia Markets

US Equity Indexes Fall Amid Hot Inflation Print, Deadlocked Iran Peace Efforts

US equity indexes dropped in Tuesday's midday trading as a hotter-than-anticipated inflation print amid soaring gas prices hit growth sectors, while a stalemate continued in Iran peace talks.The Nasdaq slumped 2% to 25,753.1, with the S&P 500 down 1% to 7,340.4 and the Dow Jones Industrial Average lower by 0.2% to 49,604.2.The US seasonally adjusted consumer price index jumped by 3.8% in April from 3.3% in the prior month, according to data released Tuesday by the Bureau of Labor Statistics, compared with the 3.7% consensus. Core CPI, which excludes food and energy prices, climbed by 2.8% from 2.6%, versus expectations for 2.7%.The CPI increased 0.6% in April, as expected, following a 0.9% increase in the previous month. Core CPI gained 0.4%, higher than the consensus estimate for a 0.3% increase. Core CPI rose by 0.2% in March.Gasoline prices rose a further 5.4% in April following a gain of more than 21% in March because of the ongoing closure of the Strait of Hormuz, the choke point for about a fifth of global crude oil flows, according to a Jefferies note.Federal Reserve Bank of Chicago President Austan Goolsbee said inflation readings show pervasive price pressures in the US economy and may even indicate overheating, Bloomberg cited NPR."If you look at the components that are not energy, like services, if that is an indication that the underlying economy is overheating then the Fed has got to be thinking about how do we break the chain of escalating inflation," Goolsbee was cited as saying Tuesday.The probability of a 25 basis-point increase in interest rates to 3.75% to 4% jumped for each of the last three meetings of this year out of the remaining five, according to data compiled by the CME FedWatch tool. The likelihood of an increase in September is in high single digits, over a fifth in October, and almost a third in December.US Treasury yields jumped, with the 10-year up 4.7 basis points to 4.46%, the highest since about July. The two-year rate jumped 5.1 basis points to almost 4%, the strongest since June.In post-midday trading, technology and consumer discretionary sectors led the decliners in a broadly negative tape. Healthcare and consumer staples were among the gainers.Meanwhile, oil prices jumped as a faltering ceasefire between the US and Iran kept the Strait of Hormuz closed, continuing the largest-ever energy supply shock.West Texas Intermediate crude oil futures surged 3.9% to $101.88, and Brent crude futures increased 3.4% to $107.70."Oil prices climbed ... as the global oil market continued to tighten amid limited prospects for a reopening of the Strait of Hormuz," Saxo Bank wrote in a note. "The move followed Trump casting doubt over a ceasefire with Israel signalling the war is not over."In precious metals, gold futures slid 1.1% to $4,675.3, and silver futures declined 1.2% to $84.92 amid concerns that higher crude oil prices will boost inflationary pressures.In company news, eBay (EBAY) rejected GameStop's (GME) proposal to acquire the e-commerce company for about $55.5 billion.

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Asia Markets

Exchange-Traded Funds Lower as US Equities Drop After Midday

Broad Market IndicatorsBroad-market exchange-traded funds IWM and IVV fell. Actively traded Invesco QQQ Trust (QQQ) shed 2.2%.US equity indexes fell after midday Tuesday after a hotter-than-expected inflation print for April hit technology and consumer discretionary shares.EnergyIShares US Energy ETF (IYE) and the State Street Energy Select Sector SPDR (XLE) each added about 0.7%.TechnologyThe State Street Technology Select Sector SPDR ETF (XLK) fell 3.5%; iShares US Technology ETF (IYW) fell 3.1%, and iShares Expanded Tech Sector ETF (IGM) eased 3.4%.The State Street SPDR S&P Semiconductor (XSD) declined 8.2%, and iShares Semiconductor (SOXX) was down 6.8%.FinancialThe State Street Financial Select Sector SPDR (XLF) rose 0.7%. Direxion Daily Financial Bull 3X Shares (FAS) rose 2%, and its bearish counterpart, Direxion Daily Financial Bear 3X Shares (FAZ), declined 1.8%.CommoditiesCrude oil rose 3.9%, and the United States Oil Fund (USO) gained 3.7%. Natural gas lost 3.5%, and the United States Natural Gas Fund (UNG) slipped 3.7%.Gold on Comex dipped 1.1% and the State Street SPDR Gold Shares (GLD) declined 1.3%. Silver fell 1.3%, and iShares Silver Trust (SLV) lost 2%.ConsumerThe State Street Consumer Staples Select Sector SPDR (XLP) rose 1.8%. The Vanguard Consumer Staples ETF (VDC) added 1.7%, and iShares Dow Jones US Consumer Goods (IYK) gained 1.8%.The State Street Consumer Discretionary Select Sector SPDR (XLY) fell 1.5%. VanEck Retail ETF (RTH) rose 0.3%, and the State Street SPDR S&P Retail (XRT) fell 0.9%.Health CareThe State Street Health Care Select Sector SPDR (XLV) added 2.4%, iShares US Healthcare (IYH) rose 2.3%, and Vanguard Health Care ETF (VHT) gained 2.1%. IShares Biotechnology ETF (IBB) was up 1.1%.IndustrialThe State Street Industrial Select Sector SPDR (XLI) fell 1.1%. Vanguard Industrials Index Fund (VIS) and iShares US Industrials (IYJ) were also lower.CryptocurrencyIn midday activity, bitcoin (BTC-USD) fell 2.2%. Among cryptocurrency ETFs, ProShares Bitcoin ETF (BITO) shed 2.5%, ProShares Ether ETF (EETH) was down 3.3%, and ProShares Bitcoin & Ether Market Cap Weight ETF (BETH) was 1.5% lower.

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