Rising Oil Prices Weigh Down US Stock Market Amid Inflation Concerns
The US stock market suffered losses on its return to trading after a three-day weekend, weighed down by rising oil prices. The S&P 500 fell 0.4%, with the Dow Jones Industrial Average dropping 575 points (1.1%) and the Nasdaq composite declining 0.1%. Brent crude oil prices rose 0.6% to $97.54, up from roughly $72 since early July due to increased fighting in the Middle East.
Higher oil prices have contributed to concerns about high inflation rates, which are expected to worsen when the US government releases its August report on wholesale inflation this Thursday and consumer price index (CPI) data on Friday. Economists predict that the CPI will show a slight easing to 3.3% from July's 3.4%, but remains above the Federal Reserve's 2% target.
The Fed is set to meet next week, with traders betting on a 60% probability of an interest rate hike. A rate increase would slow down the economy and help curb inflation, but President Donald Trump has been lobbying for lower rates instead. The bond market saw higher Treasury yields, which put pressure on companies to boost profits.
On Wall Street, Boston Scientific fell 4.8% after warning of a cybersecurity incident that affected sales and profit forecasts. Novartis shares tumbled 13.9% following disappointing news about a therapy for myotonic dystrophy type 1. Qualcomm helped limit market losses with a deal to collaborate with Amazon on AI data centers.