Oil Price Volatility Weighs on US Stocks
US stocks took another step back from their records on Tuesday as uncertainty over oil prices continued. The S&P 500 fell by 0.4% after setting its all-time high just last Friday, while the Dow Jones Industrial Average dropped by 170 points, or 0.3%. The Nasdaq composite declined by 0.7%.
The main concern is the recent fluctuations in oil prices due to the ongoing conflict between Iran and other countries. Brent crude briefly reached $90 per barrel before falling back below $87. It settled at $88.91, up 1.4% from Monday's price.
The high oil prices have a ripple effect on inflation, with gasoline costs increasing by over 25% in the past year. The average price for regular gasoline is now around $4.01 per gallon, according to AAA. This has Wall Street watching the upcoming release of July's inflation data, which is expected to show a slight decrease from June's rate of 3.5%.
The Federal Reserve is also keeping a close eye on interest rates, with some members advocating for an increase to combat inflation. However, higher rates could slow down the economy and have a negative impact on stock prices. Traders are currently betting on a coin flip's chance that the Fed will raise its main interest rate in September.