Middle East Tensions Send Oil Soaring, US Stocks Slump
The US stock market is experiencing a decline due to rising tensions in the Middle East and higher oil prices. The Dow Jones Industrial Average fell by 451.93 points, or 0.85%, to 52,962.32, while the S&P 500 lost 29.15 points, or 0.38%, to 7,689.45.
The price of Brent crude futures has reached its highest level since late July, nearing $US100 ($A138) a barrel. This increase in oil prices is attributed to Yemen's Tehran-backed Houthis attacking energy facilities and cities in US ally Saudi Arabia on Tuesday.
Some investors believe that inflation readings will have more weight for the Fed's rate trajectory, given Chair Kevin Warsh's focus on bringing prices down. Michael Matousek, head trader at US Global Investors, stated, 'It still seems to be a bit of a wild card out there. Warsh is not as easily readable as his predecessor Jerome Powell was.'
The CME FedWatch tool shows that traders now see a 58.4% chance of an increase in interest rates this month.