Attorneys General Sue Trump Administration Over -2-

0735 GMT - Oil prices climb 2% as hostilities in the Middle East escalated after the U.S. and Iran exchanged heavy fire. Meanwhile, diplomatic efforts to reopen the Strait of Hormuz and end the war have shown little progress after days of mixed messages from both sides. "Market pessimism once again grows over the prospects of a U.S.-Iran deal that could pave the way for a reopening of the Strait of Hormuz," analysts at Saxo Bank say. Still, "for now, the risk premium continues to be partly offset by President Trump's repeated insistence that an interim agreement remains within reach." In early European trading, Brent crude rises 2% to $97.89 a barrel, while WTI futures are up 2.1% to $95.78 a barrel. The benchmarks are up 6% and 8% on the week, respectively. ([e-mail])

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Gold Coming Under Pressure Before U.S. Non-Farm Payrolls Report -- Market Talk

0718 GMT - Gold is coming under pressure below the $4,500 an ounce level, as the market turns cautious ahead of the U.S. non-farm payrolls report due out this Friday, XS.com's Simon-Peter Massabni says in an email. Investors appear to be refraining from opening large new positions before the release of the data, which could influence expectations for the Fed's interest-rate trajectory, the head of Business Development says. "Without a clear signal from the data, gold is likely to continue trading in a consolidative pattern," Massabni adds. Spot gold is 0.4% lower at $4,469.31 an ounce. ([e-mail])

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Rio Tinto Shares Lack Near-Term Growth Catalysts -- Market Talk

0713 GMT - Rio Tinto shares have little room left to run after rising around 8% since the Middle East conflict began, RBC Capital Markets analysts Ben Davis and Kaan Peker write. After a strong run this year, catalysts for further growth look limited, they say. Markets are already expecting some asset sales, like borates and mineral sands, as well as some infrastructure deals, they add. Rio is also still on the lookout for copper assets, which could prove to be expensive, the analysts say. It is difficult to see the miner getting a boost from higher commodity prices given the warning signs in the Chinese economy, they write. They downgrade their rating on the stock to underperform. London shares fall 1.4% to 8,193 pence. ([e-mail])

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Aluminum Price Tipped to Climb on Continuing Hormuz Closure -- Market Talk

0312 GMT - The price of aluminum is likely to rise further if the Strait of Hormuz remains closed, says Commonwealth Bank of Australia analyst Vivek Dhar. "As bauxite and alumina stockpiles dwindle, more Middle Eastern aluminum supply is expected to be curtailed," Dhar says. That could result in roughly 8% of global output being sidelined within weeks, up from 4.5% today, he says. Even where Gulf smelters can keep producing, exporting metal by trucking is costly. "And estimates of these overland routes to handle aluminum product volumes range widely from 40?80% of pre?war flows," Dhar says. LME 3-month aluminum trades up 0.1% at $3,756.50 per metric ton. ([e-mail]; @RhiannonHoyle)

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Iron Ore Falls Amid Weak Demand -- Market Talk

0236 GMT - Iron ore prices are lower in early Asia trade, as China's steel market enters its season of weak demand and shipments from Australia and Brazil are expected to rise, says Bank of China International Futures analysts in a note. China's official manufacturing PMI stood at 50.0 in May, pointing to limited support from industrial demand, they add. Supply remains relatively ample, with major miners Rio Tinto and BHP reporting higher iron ore output from a year earlier despite sequential declines, they say. Rising inventories are also weighing on sentiment, leaving prices squeezed between softening fundamentals and cautious macroeconomic expectations, they add. The most actively traded September iron ore contract on the Dalian Commodity Exchange is 0.6% lower at 780 yuan a ton. ([e-mail]; @ivy_jiahuihuang)

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(END) Dow Jones Newswires

06-03-26 1118ET