TOKYO - Stocks ticked higher and crude oil held not far from multi-week lows on Wednesday, as investors took a ceasefire between Israel and Iran as a green light to head back into riskier assets and cast aside immediate worries about an energy shock.

The dollar languished close to an almost four-year low versus the euro, with two-year US Treasury yields sagging to 1-1/2-month troughs as lower oil prices reduced the risk to bonds from an inflation spike.

The shaky truce has so far held, although Israel says it will respond forcefully to Iranian missile strikes that came after US President Donald Trump announced an end to the hostilities.

In addition, US airstrikes did not destroy Iran's nuclear capability and only set it back by a few months, according to a preliminary US intelligence assessment, contradicting Trump's earlier comments that Iran's nuclear program had been "obliterated".

Europe's Stoxx 600 index edged up 0.2 percent in early trade, while S&P 500 futures and Nasdaq futures were flat.

Japan's Nikkei rose 0.4 percent.

An MSCI index of global stocks held steady after pushing to a record high overnight.

"If the still tense situation in the Middle East does indeed continue to calm down, the stock markets could have a pleasant July ahead of them, in line with their typical seasonal pattern," analysts at Frankfurt-based Metzler said.

"This would result in new all-time highs in the US, possibly further fuelled by renewed expectations of interest rate cuts by the Fed."

A series of US macroeconomic data released overnight including on consumer confidence showed possibly weaker than expected economic growth in the world's largest oil consumer, bolstering expectations of Federal Reserve rate cuts this year.

Brent crude rose 2 percent to $68.43 per barrel, bouncing a bit following a plunge of as much as $14.58 over the previous two sessions. US West Texas Intermediate crude was up as much as to trade at $65.60 per barrel.

"While concerns regarding Middle Eastern supply have diminished for now, they have not entirely disappeared, and there remains a stronger demand for immediate supply," analysts at ING wrote in a note to clients.

The two-year US Treasury yield was at its lowest since May 8 at 3.7848 percent.

The euro slipped 0.1 percent to $1.1594, still close to the overnight high of $1.1641, a level not seen since October 2021, while the US dollar index, which measures the currency against six major counterparts, was only slightly higher at 98.079.

Gold rose marginally to about $3,328 per ounce.

Aside from geopolitics, US monetary policy continues to dominate investor concerns.

Federal Reserve Chair Jerome Powell said on Tuesday that higher tariffs could begin raising inflation this summer, a period that will be key to the US central bank considering possible rate cuts.

Markets continue to price in a roughly 19 percent chance that the Fed will cut rates by a quarter point in July, according to the CME FedWatch tool.