Oil Prices Soar as Iran Attacks US Forces in Middle East

Iran's surprise missile attack on US forces in the Middle East has sent oil prices soaring above $90 per barrel, with President Trump vowing to retaliate against Iran. The sudden escalation of violence comes just hours before the Federal Reserve's July Open Markets Committee meeting, where interest rates are set.

The attack has caused a spike in oil prices, which had been falling in recent days as the US paused its bombing campaign to reassess its strategy. Benchmark Brent Crude futures briefly topped $100 per barrel last week following the collapse of the US-Iran ceasefire.

The S&P 500 and oil prices have moved in opposite directions since the start of the war in Iran on February 28, with the index hitting its lowest point for the year in late March just before Brent Crude spot prices peaked above $125 per barrel. The recent spikes in oil prices have knocked down the S&P 500 by 2.6%.

US oil companies like Chevron and Devon Energy have tracked oil prices, rising with higher global oil prices without being hurt by supply constraints. However, a prolonged war could lead to sustained high prices, making an interest rate hike more likely and negatively affecting all stocks, including oil stocks.