Rising Oil Prices Weigh on US Stocks as Inflation Concerns Grow
US stocks fell on Tuesday in their return to trading after a three-day weekend, pressured by rising oil prices.
The S&P 500 declined 0.4%, while the Dow Jones Industrial Average dropped 517 points or 1% as of 2 p.m. Eastern time, and the Nasdaq composite was 0.2% lower.
The price of a barrel of Brent crude briefly climbed to $99.46 before giving back most of its gain and ending at $97.05, up 0.1%. Oil prices have risen from around $72 since early July due to increased fighting in the Middle East constricting global oil flow.
The higher cost of oil has exacerbated concerns about inflation, which is expected to accelerate to 5.4% in August from 4.7% in July according to economists. The wholesale inflation report will be released on Thursday, and consumer inflation data will come out on Friday with a predicted 3.3% rate, still above the Federal Reserve's 2% target.
The Fed is set to meet next week to decide whether to cut, raise or hold interest rates steady. Raising interest rates would typically be the traditional move when inflation is high, but President Donald Trump has been lobbying for lower interest rates instead, potentially giving the economy and inflation an extra boost.