Oil Price Surge Sparks Concern on Wall Street Amid Hormuz Standoff

A rally in oil prices is causing concern on Wall Street as Brent crude surged above $87 due to the lack of a deal to revive the Strait of Hormuz. The increased energy costs are fueling concerns that the Federal Reserve may have to raise interest rates this year despite a slowdown in the labor market.

Nvidia Corp.'s shares fell after reports emerged that Wall Street giants were working with the chipmaker on a $500 billion AI funding package. Meanwhile, President Donald Trump has lashed out against Iran's demands for war compensation as part of talks to wind down the conflict and reopen the strait.

Market participants are worried about the lack of progress in negotiations between the US and Iran, with some analysts predicting that a breakthrough could exert downward pressure on oil prices. However, others caution that a breakdown in negotiations or renewed supply disruptions could quickly revive the geopolitical risk premium.