Oil Prices Climb Amid Middle East Tensions
Stocks in the US took a hit on Tuesday as investors digested the latest developments in the war between Iran and the West. The S&P 500 fell 0.6%, while the Dow Jones Industrial Average dropped 628 points, or 1.2%, and the Nasdaq composite dipped 0.3%.
The decline was largely driven by rising oil prices, which climbed as high as $99.46 a barrel before settling at $97.92, up 0.9%. This marks a significant increase from July's levels of around $72 per barrel.
Increased fighting in the Middle East has led to concerns about global oil supply and higher inflation. The US government is set to release its August report on wholesale inflation on Thursday, which economists expect will show an acceleration to 5.4% from 4.7% in July.
The more closely watched consumer price index (CPI) will be released on Friday, with economists predicting a slight easing to 3.3% from July's 3.4%. However, this remains well above the Federal Reserve's target of 2%.
The central bank is set to meet next week to decide whether to cut, raise or hold interest rates steady. A rate hike would likely lead to a stronger US dollar and higher borrowing costs for companies and individuals.