Rising Oil Prices Weigh on US Stocks Amid Inflation Concerns
The US stock market suffered losses on Tuesday as investors grappled with rising oil prices and concerns about inflation. The S&P 500 fell 0.6%, while the Dow Jones Industrial Average dropped 628 points, or 1.2%. The Nasdaq composite dipped 0.3%.
The price of Brent crude briefly reached $99.46 per barrel before settling at $97.92, up 0.9% from July's prices. This increase in oil prices has worsened worries about inflation, which is expected to accelerate to 5.4% in August from 4.7% the previous month.
The US government will release its August report on wholesale inflation on Thursday, followed by a report on consumer inflation on Friday. Economists expect the latter to show a slight easing of inflation to 3.3% from July's 3.4%, but this remains above the Federal Reserve's target of 2%.
The Fed will meet next week to decide whether to raise, lower, or keep interest rates steady. The traditional response to high inflation is to increase interest rates, which would slow the economy and curb price increases.