NEW YORK/ LONDON, April 7 (Reuters) - MSCI's global equities gauge fell slightly on Tuesday, while U.S. crude oil prices traded above $115 per barrel as investors anxiously awaited the outcome of a standoff between the United States and Iran.
While Iran showed no sign of accepting U.S. President Donald Trump's ultimatum to open the Strait of Hormuz by the end of the day,
Iranian media reported that strikes on Iran had intensified and hit railway and road bridges, an airport and a petrochemical plant. Trump has threatened to destroy Iranian power plants and other key infrastructure if Tehran does not meet his deadline.
Investors have been laser-focused on the U.S.-Israeli war on Iran, which is now in its sixth week, as wild volatility in oil prices has amped up concerns about inflation and a potential slowing of the global economy. Wall Street indexes were lower on Tuesday, having made little progress in recent days as hopes for a quick resolution to the war have been replaced by uncertainty ahead of Tuesday's deadline.
HEADING FOR THE SIDELINES
"Either we are gonna destroy (Iran) or this will be resolved. That makes investment decisions extremely difficult with the information we have," said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.
"It's leading most investors to head to the sidelines because why sell everything if this is headed for resolution and why buy something if you could be seeing a very significant decline in a matter of days?" said Meckler, suggesting that if Trump carries out his threat, it would usher in a "very bearish period" for markets.
In U.S. equities, at 11:44 a.m. ET (1544 GMT), the Dow Jones Industrial Average (.DJI), fell 409.83 points, or 0.88%, to 46,260.05, the S&P 500 (.SPX), lost 60.07 points, or 0.91%, to 6,551.76 and the Nasdaq Composite (.IXIC), fell 276.66 points, or 1.26%, to 21,719.95.
MSCI's gauge of stocks across the globe (.MIWD00000PUS), dropped 5.95 points, or 0.60%, to 991.71.
The pan-European STOXX 600 (.STOXX), index fell 0.96%, while Europe's broad FTSEurofirst 300 index (.FTEU3), slipped 24.74 points, or 1.04%.
Iran has effectively closed the Strait of Hormuz, a global transit chokepoint through which a fifth of oil and gas is shipped, since the start of the war in late February. It has pushed back against U.S. pressure to reopen the strait, saying it wanted a lasting end to the war instead of a temporary ceasefire.
Oil prices, which have moved sharply in response to supply concerns stemming from the war, rallied on Tuesday as the strait remained closed and strikes on Iran intensified.
U.S. crude was up 3.02% at $115.81 a barrel after touching a high of $117.63 and Brent traded at $110.14 per barrel, up 0.36%.
CONFLICT TRIGGERS ECONOMIC FEARS
Inflation concerns have also upended the global rates outlook, with traders no longer pricing in any rate cuts from the U.S. Federal Reserve this year.
In currencies, the U.S. dollar traded close to its highest levels in almost 11 months with investors pausing ahead of the U.S. deadline for Iran.
The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.07% to 99.93, with the euro up 0.23% at $1.1569.
Against the Japanese yen , the dollar strengthened 0.18% to 159.94.
In cryptocurrencies, bitcoin fell 2.45% to $68,119.25. Ethereum declined 3.34% to $2,077.21.
In U.S. Treasuries, yields advanced modestly as the Iran deadline loomed.
The yield on benchmark U.S. 10-year notes rose 2.8 basis points to 4.363%, from 4.335% late on Monday, while the 30-year bond yield rose 4.1 basis points to 4.9306%.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.2 basis points to 3.862%.
In precious metals, gold prices were little changed as caution prevailed.
Spot gold was flat at $4,647.46 an ounce while U.S. gold futures fell 0.22% to $4,646.60 an ounce. However, spot silver fell 2.38% to $71.05 an ounce while U.S. silver futures fell 2.28% to $71.01 an ounce.
Reporting by Sinéad Carew in New York, Lawrence White in London and Ankur Banerjee in Singapore; Editing by Sonali Paul, Raju Gopalakrishnan, Susan Fenton, Rod Nickel
