Brent Crude Surpasses $100 as Tensions Between US and Iran Escalate

The price of Brent crude oil has surged past $100 a barrel for the first time since July, driving down stocks on Wall Street. The S&P 500 index fell 0.5%, while the Dow Jones Industrial Average dropped 346 points, or 0.7%. Oil prices have been rising due to ongoing tensions between the US and Iran, with the conflict causing traffic disruptions in the Strait of Hormuz.

The price increase has fueled inflation concerns, with gasoline prices up 32% from a year ago to $4.22 per gallon. The average price for a gallon of diesel hit an all-time high at $5.94 overnight and continues to climb. Inflation was already high due to the ongoing US trade war with much of the world.

The Federal Reserve is closely monitoring inflation, which remains above 3%. The central bank has been keeping interest rates steady, but investors are now predicting a 62% chance that it will raise its benchmark interest rate at its next meeting. Higher interest rates would make borrowing more expensive and aim to slow the economy and cool inflation.