Oil Prices Soar as Middle East Conflict Escalates

The global stock market and oil prices are seeing a mixed reaction to the escalating Middle East conflict. U.S. stock futures were down early Tuesday, with futures for the S&P 500 falling 0.3% before the bell and Dow Jones Industrial Average futures sliding 0.8%. However, Brent crude oil prices rose by 1.5% to $98.48 a barrel, its highest level in about six weeks.

The conflict has led to a surge in oil prices, with benchmark U.S. crude increasing by 2.5% to $93.79 a barrel, about 40% higher than it was in late February just before the U.S. and Israel launched their attacks on Iran. This rise in oil prices will likely impact consumers and businesses alike, making this week's inflation data from the government even more significant.

The Federal Reserve is set to meet next week to decide whether to cut, raise or hold interest rates, a decision that has been complicated by the strong job market and historically low employment rate. The U.S. government will release its August report for inflation at the wholesale level, known as the Producer Price Index (PPI), on Thursday, followed by the Consumer Price Index (CPI) on Friday.

In Asia, Tokyo's Nikkei 225 gave up early gains to sink 1.7%, with major exporters being sold due to a surge in the value of the Japanese yen. Shares in Toyota Motor Corp. shed 4.1% and electronics maker Panasonic Holdings Corp. fell 5.8%. The U.S. dollar edged down to 154.25 Japanese yen from 154.34 yen.