Oil Prices Soar on Middle East Tensions, Stocks Sensitive to Fed Decision
The price of oil has surged to $87.01 per barrel following renewed fighting in the Middle East, where Iran launched missiles at American forces and the US military responded with strikes against Tehran-backed militias in Iraq.
Brent crude jumped 6% after the conflict escalated, which is a significant increase from its recent low of $72 earlier this month and last week's high of $102. The price swings have raised concerns that inflation may accelerate, just when it had begun to slow down more than expected.
The uncertainty surrounding oil prices has traders wondering what the Federal Reserve will announce on interest rates after its two-day meeting concludes today. There is a roughly 36% probability that the Fed will raise its main interest rate for the first time in three years, which could help keep inflation under control but also slow down the economy and impact stock prices.
The US stock market has been affected by the increased uncertainty, with the S&P 500 sinking 0.7%, the Dow Jones Industrial Average down 760 points or 1.4%, and the Nasdaq composite 1% lower. The tech-heavy Nasdaq is being weighed down by stocks like Nvidia, which fell 2.6%, Advanced Micro Devices, which dropped 4.4%, and Micron Technology, which declined 3.7%.