Crude Prices Surpass $100 as US-Iran Conflict Escalates
Stocks fell on Wall Street as crude oil prices surged back above $100 per barrel, driven by escalating tensions in the US-Iran conflict. The S&P 500 index dropped 0.3%, with the Dow Jones Industrial Average falling 311 points, or 0.6%, by mid-morning. Oil companies saw gains, however, with Exxon Mobil rising 1.9% and Chevron up 1.6%. Brent crude prices rose 3.3% to $101.18 a barrel, marking the first time since July that the price has surpassed $100.
The conflict between the US and Iran has effectively shut down traffic in the Strait of Hormuz, where nearly one-fifth of global oil supply passes. The ongoing trade war with much of the world has also fueled already-high inflation. Gasoline prices in the US have increased by 32% from last year to $4.22 per gallon.
The US government will release key inflation reports this week, including the Producer Price Index for August and the Consumer Price Index for August. These numbers are expected to show that inflation remains above 3%, a target rate for the Federal Reserve.