Oil Prices Surge as Wall Street Sinks Amid Inflation Fears
Oil prices have continued to rise, pushing U.S. stocks lower on Tuesday as they returned from a three-day weekend. The latest fighting in the war with Iran has kept oil prices high, with Brent crude briefly climbing to $99.46 per barrel before settling at $97.92, up 0.9%.
This increase in oil prices has worsened worries about inflation, which is already above the Federal Reserve's target of 2%. On Thursday, the U.S. government will release its August report on wholesale inflation, expected to show an acceleration to 5.4% from 4.7% in July.
The more closely watched report on consumer inflation will be released on Friday, showing how much people are paying for everyday items such as groceries and clothes. Economists expect a slight easing of inflation to 3.3% from July's 3.4% rate.
The Federal Reserve will meet next week to decide whether to cut or raise interest rates, with traders betting on a 60% probability that the Fed will raise its federal funds rate at the conclusion of its meeting on September 16.