Oil Price Surge Drags Down US Stocks Amid Inflation Fears
US stocks are experiencing a slow start to trading on Tuesday after a three-day weekend. The S&P 500 fell by 0.4%, while the Dow Jones Industrial Average dropped by 517 points, or 1%.
The decline in stocks is being driven by rising oil prices, which have reached as high as $99.46 per barrel of Brent crude. Although the price has since retreated to $97.05, it remains up from around $72 in early July due to increased tensions in the Middle East.
Higher oil prices are adding to concerns about inflation, which is already above target at 3.4% according to the latest data. The US government's August report on wholesale inflation is expected to show an acceleration to 5.4%, while Friday's update will reveal how much consumers are paying for goods and services.
The Federal Reserve's decision next week on interest rates could have a significant impact on the economy, with traders betting on a 60% probability of a rate hike. However, President Donald Trump has been lobbying for lower interest rates, while new Fed Chairman Kevin Warsh wants to give financial markets fewer clues about future rate decisions.