Oil Price Surge Trumps Tech Stock Decline Amid Fed Rate Steady Decision
The price of Brent crude oil surged 7.3% to settle at $88.09 per barrel after renewed fighting in the war with Iran raised concerns about global oil supply. The increase was a significant jump from the recent fluctuations, where the price had swung as low as $72 early this month and as high as $102 last week due to uncertainty over a potential deal between the US and Iran.
The Fed's decision to keep interest rates steady despite a 34% probability of a rate hike had been expected by traders. However, Chairman Kevin Warsh implied that the bond market was already doing some work to restrain inflation, citing the increase in yields since the last meeting six weeks ago. This lack of guidance from the Fed has led to increased uncertainty and volatility in financial markets.
On Wall Street, tech stocks were hit hard as the S&P 500 fell 1.5% with Nvidia leading the decline at 3.6%. Other AI-related companies like KLA Corp. and SK Hynix also suffered losses despite reporting strong profits. The Nasdaq composite dropped 1.7%, falling 9.8% below its record set last month.