Oil Price Surge Sends US Stocks Sliding Amid Inflation Fears
Oil prices continue to rise, reaching $97.92 per barrel, up 0.9% from early July's level of around $72. The increased fighting in the Middle East has constricted the global flow of oil, pushing prices higher.
The rising cost of oil is exacerbating inflation concerns, with economists expecting an acceleration to 5.4% wholesale inflation rate by August, up from 4.7% in July. The consumer price index (CPI) is also expected to show a slight easing to 3.3% from July's 3.4%, but remains above the Federal Reserve's target of 2%.
The Fed will meet next week to decide whether to cut, raise or hold interest rates steady. Traditionally, high inflation prompts rate hikes to slow down the economy and curb prices. However, President Donald Trump has been lobbying for lower interest rates, which could give the economy an extra boost.