Crude Price Surge Pressures US Stocks Amid Inflation Concerns

The US stock market is experiencing pressure today due to rising crude oil prices and inflation expectations. The S&P 500 Index SPY has fallen by -0.42%, while the Dow Jones Industrial Average DIA is down by -0.55%. The Nasdaq 100 Index QQQ is also down by -0.23%.

The surge in crude oil prices, which have jumped over +2% to a 1-week high, is contributing to higher bond yields and inflation expectations. The 10-year T-note yield has risen to a 19-month high of 4.75%. This increase in interest rates is making borrowing more expensive for consumers and businesses.

Additionally, the recent hawkish comments from Fed Chair Warsh have boosted the chances of a Fed rate hike at next month's FOMC meeting to 64% from 36% before he spoke last Friday. This has added to the pressure on stocks.

However, Q2 earnings results are still expected to be strong, with the S&P 500 tracking for earnings growth of almost 32%. Energy producers and service providers are also benefiting from the rise in crude oil prices, with some stocks up by over +4% today.