U.S. and European shares fell on Friday while oil prices gained as markets monitored tense U.S.-Iran talks and digested new data that dented expectations for a Federal Reserve rate hike next month. Faltering talks to end the Iran war left oil and gas prices poised for sizeable weekly gains, with the U.S. threatening to ramp up economic pressure on Iran, including extending a naval blockade. U.S. consumer sentiment deteriorated in early August amid the rising cost of living because of the Middle East conflict, a survey showed on Friday. The U.S. dollar and yields on U.S. Treasuries fell on a surprise drop in U.S. retail sales, further reducing expectations of a Federal Reserve rate hike at next month's meeting. On Wall Street, the Dow Jones Industrial Average fell 85.82 points, or 0.16%, to 53,754.17, the S&P 500 fell 10.76 points, or 0.14%, to 7,788.23 and the Nasdaq Composite fell 92.60 points, or 0.34%, to 26,710.43. In Europe, the STOXX 600 gauge retreated 0.24% as losses in the tech sector were broadly offset by gains in capital-intensive shares such as defence and automakers. Brent crude futures rose to $87.68 per barrel, up 0.7% on the day, and U.S. oil prices rose 0.3% to $81.49. In currencies, the yen strengthened 0.24% against the greenback to 159.09 per dollar, after a Reuters report that the Bank of Japan could raise rates as soon as September, according to three sources familiar with policymakers' thinking. The dollar index fell 0.39% to 99.53, with the euro up 0.47% at $1.1581. Spot gold rose 0.85% to $4,387.41 an ounce.
