Oil prices climbed and the US dollar strengthened in early Asian trading as investors reacted to escalating Houthi attacks on Saudi Arabia, raising concerns about a broader Middle East conflict. Brent crude rose 0.4% to $105.10 a barrel, while the dollar gained slightly against major currencies. The Australian dollar remained steady. The attacks, including a strike on Saudi Arabia’s main airport on October 11 that killed 12 people, have heightened fears of disruptions to energy supplies and global trade, particularly near the critical Bab el-Mandeb shipping chokepoint.
The escalating tensions add volatility to a pivotal week for markets, with key inflation data due in the US and Europe, along with speeches from central bank officials. Higher energy costs could exacerbate inflation pressures, potentially pushing the Federal Reserve to raise interest rates more aggressively. Traders are closely watching the upcoming US consumer price data and a speech by Federal Reserve chair Kevin Warsh for clues on future policy moves.
The S&P 500 futures gained after the index closed 0.6% higher in New York on October 9. Despite recent turbulence driven by concerns over artificial intelligence demand, the S&P 500 remains near its record high. Analysts expect third-quarter profits to rise roughly 25% from a year earlier, marking seven consecutive quarters of double-digit earnings growth.
The dollar traded in a narrow range after posting its fourth straight weekly gain, supported by elevated oil prices and the war with Iran. Speculative traders remain bullish on the dollar, betting the US economy can better withstand further interest rate increases. The euro touched its lowest since May 2025 last week, providing additional support for the greenback. Barclays strategists noted that US growth outperformance and Europe’s fiscal and energy vulnerabilities point to further upside for the dollar, though stretched long positioning could interrupt the rally in the near term.