Oil Price Volatility Weighs on U.S. Stocks Amid Ongoing Iran Uncertainty

U.S. stocks are experiencing volatility as oil prices continue to swing due to uncertainty surrounding the Iranian war. The S&P 500 fell 0.4%, moving further away from its all-time high set on Friday, while the Dow Jones Industrial Average was down 145 points or 0.3% at 2:33 p.m. Eastern time.

The price of Brent crude briefly jumped above $90 in the morning before falling back below $87, eventually settling at $88.71, up 1.1% from Monday's settlement price. The recent fluctuations have become typical since the U.S. and Israel attacked Iran in late February, which led to the closure of the Strait of Hormuz.

The higher oil prices are making inflation worse, contributing to an average cost of $4.01 for a gallon of regular gasoline, up from less than $3.14 a year ago. The market is eagerly awaiting the U.S. government's release of its latest monthly reading on inflation on Wednesday, which is expected to show inflation remains high but decelerated to 3.4% in July.

The Federal Reserve's decision on interest rates is also being closely watched, as a potential increase could help slow price increases but would also slow the overall U.S. economy and make borrowing more expensive.