Oil Price Surge Sends US Stocks Tumbling Amid Fed Uncertainty
Oil prices surged on Wednesday as fighting resumed in the Middle East, raising concerns about global oil flows. Brent crude rose 7.3% to settle at $88.09 per barrel.
The increase came after a volatile day of trading on Wall Street, where US stocks fell due to uncertainty over what the Federal Reserve will do to combat high inflation. The S&P 500 dropped 1.5%, while the Dow Jones Industrial Average plummeted 2.2% and the Nasdaq composite sank 9.8% below its record set last month.
The Fed's decision to keep interest rates steady, despite three policymakers voting for a hike, added to market uncertainty. The yield on the 10-year Treasury bond jumped to 4.68%, up from 3.97% before the war with Iran sent oil prices soaring.
Treasury yields swiveled after the Fed's decision, with the 2-year Treasury yield falling to 4.24% and the 10-year yield rising to 4.68%. The increase has already pushed long-term US mortgage rates to their highest level in nearly a year.