Oil Prices Swing as Wall Street Awaits Fed Interest Rate Decision
US stocks are trading near their records despite uncertainty over the Iran war's impact on oil prices. The S&P 500 fell 0.3%, while the Dow Jones Industrial Average was down 100 points, or 0.2%. The Nasdaq composite dropped 0.6%.
The price of Brent crude briefly surged above $90 before settling at $88.77, up 1.2% from Monday's settlement price. This volatility has become a norm since the US and Israel attacked Iran in late February, causing the closure of the Strait of Hormuz and keeping much of the world's oil pent up in the Middle East.
The rise in oil prices has contributed to higher inflation, with the average cost for a gallon of regular gasoline reaching $4.01, according to AAA. Economists expect this week's inflation data to show a deceleration from 3.5% in June to 3.4% in July.
The Federal Reserve's next interest rate decision is on everyone's mind, with traders giving it a coin flip's chance of raising the main interest rate at its September meeting. This would be the first increase in more than three years and could anger President Donald Trump, who has been lobbying for lower interest rates.