Oil Prices Soar as Fed Keeps Rates Steady, Dragging Stocks Lower

Oil prices surged on Wednesday as fighting resumed in the war between the US and Iran, raising concerns about global oil supplies. The price of Brent crude jumped 7.3% to settle at $88.09 per barrel.

The increase has sparked worries that inflation will reaccelerate, with traders initially betting on a roughly 34% probability that the Federal Reserve would raise its main interest rate in the afternoon.

However, Fed officials voted to keep the federal funds rate steady, despite three members of the policymaking committee wanting to raise rates. Chairman Kevin Warsh implied that the bond market may already be doing some of the work to restrain inflation.

The uncertainty surrounding the Fed's decision led to a volatile trading session on Wall Street, with the S&P 500 falling 1.5% and the Dow Jones Industrial Average dropping 2.2%.