Oil Price Volatility Weighs on US Stocks as Iran Conflict Lingers
US stocks continued their modest decline from record highs on Tuesday as investors weighed the impact of higher oil prices and uncertainty surrounding the Iran conflict.
The S&P 500 fell 0.3% for a second straight day, while the Dow Jones Industrial Average dipped 184 points or 0.3%, and the Nasdaq composite sank 0.6%. The erratic moves in the oil market have become typical since the US and Israel's attack on Iran in late February led to the closure of the Strait of Hormuz.
The price for a barrel of Brent crude briefly jumped above $90 before falling back below $87, eventually settling at $88.91, up 1.4% from Monday. Higher oil prices have sent inflation soaring, with the average cost for a gallon of regular gasoline reaching $4.01 according to AAA.
The uncertainty surrounding the Iran conflict and its impact on global markets has Wall Street's attention focused on Wednesday's release of the latest monthly reading on inflation, which economists expect to show decelerated to 3.4% in July from 3.5% in June.