Oil prices fall; stocks rise as government interest rates fall

NEW YORK, Sept 7 (Reuters) – Oil prices fell sharply on Wednesday on worries about demand, while Wall Street stocks rallied after the latest loss.

Brent oil futures hit their lowest since early February. Earlier, data showed that China’s export growth slowed in August. read more

Benchmark U.S. Treasury yields fell after earlier hitting three-month highs, with the 10-year yield at 3.29%, while all three major U.S. stock indexes rose in early trade.

Concerns that inflation will remain persistently high and continue to drive interest rates higher have pushed interest rates higher in recent weeks.

The European Central Bank is expected to raise interest rates sharply when it meets this week, while the US Federal Reserve is expected to raise interest rates by another 75 basis points at its September 20-21 meeting. read more

Fed Chair Jerome Powell is expected to speak on Thursday.

“We have seen a global repricing and it has generally been supported by an acceleration of expected tightening due to inflation concerns,” said Jonathan Cohn, head of fixed income trading strategy at Credit Suisse in New York.

US crude recently fell 3.51% to $83.83 a barrel and Brent was at $89.89, down 3.17% on the day.

The Dow Jones Industrial Average (.DJI) rose 179.79 points, or 0.58%, to 31,325.09, the S&P 500 (.SPX) gained 23.12 points, or 0.59%, to 3,931.31 and The Nasdaq Composite added 3.6.6 points (.0.55% to 11,608.54.

The pan-European STOXX 600 index (.STOXX) lost 0.60% and MSCI’s measure of shares across the globe (.MIWD00000PUS) rose 0.07%.

The US dollar index was weaker. The dollar currency earlier reached a new 24-year high against the Japanese yen.

The dollar index fell 0.118 percent. The Japanese yen weakened 1.17% against the dollar to 144.50 per dollar.

The euro rose 0.42% to $0.9944.

The European Union proposed a price cap on Russian gas on Wednesday hours after President Vladimir Putin threatened to cut off all supplies if they took such a step, raising the risk of rationing in some of the world’s richest countries this winter. read more

Liz Truss, who took over as Britain’s prime minister on Tuesday, promised immediate action to help the economy, which is facing double-digit inflation and an expected prolonged recession. read more

Sterling last traded at $1.1466, down 0.43% on the day.

(This story was re-filed to change the headline code to GLOBAL MARKETS from GLOBAL STOCKS)

Additional reporting by Karen Brettell in New York and Elizabeth Howcroft in London Editing by Angus MacSwan, William Maclean and Josie Kao

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