Morning Bid: Oil jumps and Tesla skids

By Mike Dolan

(Reuters) -What matters in U.S. and global markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

Oil prices jumped 4% on a wave of new retaliatory sanctions on Russian crude over Moscow's repeated bombardment of Ukraine, adding to fresh trade and inflation anxiety on Wall Street just as megacap Tesla tumbled overnight on a big profits miss.

U.S. President Donald Trump hit Russia's two biggest oil companies, Rosneft and Lukoil, with the sanctions in a turnaround that also saw him cancel a meeting with Russian counterpart Vladimir Putin. Although still down 15% year-on-year, U.S. crude jumped above $60 per barrel to two week highs.

Former Russian President Dmitry Medvedev said the latest Trump moves over Ukraine were "an act of war against Russia."

Britain sanctioned Rosneft and Lukoil last week. Separately, EU countries approved a 19th package of sanctions against Russia for the war that includes a ban on imports of Russian LNG.

And the move came as industry sources told Reuters Indian refiners were poised to sharply curtail imports of Russian oil to ensure they were in compliance with U.S. sanctions. New Delhi is under pressure from stiff U.S. trade tariffs over the issue.

The energy jolt comes as Wall Street awaits the September U.S. inflation report tomorrow and pushed up Treasury yields despite a decent 20-year bond auction on Wednesday. The dollar firmed too, with the yen hitting its weakest since October 10.

Gold regained some of its poise after steep losses earlier in the week.

Hit by a 10% earnings-day drop in Netflix and a 6% drop in chipmaker Texas Instruments, the S&P500 lost 0.5% on Wednesday as U.S.-China trade tensions heated up once again. Tesla's 4% stock drop overnight adds to the jitters after the electric car giant's fourth consecutive profit miss and Wall Street index futures failed to rebound ahead of Thursday's bell.

Intel tops Thursday's heavy earnings diary.

The China trade worries jangled more broadly.

According to a Reuters report, the Trump administration is considering a plan to curb an array of software-powered exports to China to retaliate against Beijing's latest round of rare earth export restrictions. Trump said the long-awaited meeting with Chinese leader Xi Jinping may now not happen as the November 1 deadline for more severe U.S. tariffs looms.

The Philadelphia Semiconductor index tumbled 2.4%.

Trump's cabinet secretaries view China's move on rare earths as "full-blown economic war", a person familiar with administration thinking told Reuters. "The prospect for escalation is severe."