Global Markets Waver Amidst Oil Price Volatility and Anticipation of Trump-Xi Talks

Global shares traded largely lower on Thursday, with investors digesting recent fluctuations in oil prices and the U.S. bond market. Major European indices saw declines, with France's CAC 40 shedding nearly 0.8% and Germany's DAX falling 0.9%. U.S. stock futures also indicated a downward drift.

In Asia, Japan's Nikkei 225 bucked the trend, gaining 0.8%, partly due to increased interest in artificial intelligence boosting some chipmakers. Australia's S&P/ASX 200, however, fell 0.7%, while Hong Kong's Hang Seng lost 0.3% and the Shanghai Composite dipped 1.2%. Trading was suspended in South Korea for a holiday.

Energy markets saw benchmark U.S. crude rise 2.35% to $94.33 a barrel and Brent crude gain 2.77% to $106.94 a barrel. The price of Brent crude remains significantly elevated compared to pre-conflict levels, fueling concerns that ongoing conflict in the Middle East could disrupt oil supplies.

Talks involving mediators between U.S. and Iranian officials are ongoing, but have yet to yield concrete results. Markets are also closely watching for developments from the upcoming meeting between Presidents Donald Trump and Xi Jinping at the White House. Discussions are expected to cover trade, the situation in Iran, and artificial intelligence, though some analysts express skepticism about the likelihood of significant agreements.

On the monetary policy front, persistent U.S. inflation led the Federal Reserve to raise its short-term interest rate last week for the first time in three years. Fed Governor Michael Barr indicated this week that further rate hikes are probable to achieve the Fed's 2% inflation target.

Meanwhile, the Bank of Japan recently increased its benchmark interest rate to counter the weakening Japanese yen. However, this move, which had been anticipated for weeks, has not significantly bolstered the yen, posing a challenge for Japan, a net oil importer, amid soaring energy prices.

In currency trading, the U.S. dollar saw a slight increase against the Japanese yen, trading at 158.37 yen. The euro remained steady at $1.1388.