Oil Prices Surge on Geopolitical Tensions, Fed Rate Hike Expectations Dented

Oil prices rose more than US$1 a barrel on August 14 as markets digested new data that dented expectations for a Federal Reserve rate hike next month. The data showed US consumer sentiment deteriorated in early August, and retail sales fell unexpectedly.

The S&P 500 fell from record highs under pressure from shares in chip equipment maker Applied Materials, which declined along with other major chipmakers. The Nasdaq and Dow Jones Industrial Average also fell 0.28% and 0.20%, respectively.

Geopolitical tensions continued to weigh on markets as the US threatened to ramp up economic pressure on Iran. Brent crude oil futures settled at US$88.52 a barrel, while US futures finished at US$82.40. The yen strengthened against the greenback after a Reuters report suggested the Bank of Japan could raise rates in September.