Oil Prices Surge on Strait of Hormuz Uncertainty, US Inflation Data Looms

US stocks are poised for a muted start to the week as oil prices surge on concerns that the Strait of Hormuz will not reopen soon. September S&P 500 E-Mini futures rose by +0.02%, while Nasdaq 100 E-Mini futures gained +0.12%. The price of WTI crude oil increased over +1% on Monday, with Iran reiterating that the waterway would only be reopened once Washington met a series of demands.

US President Donald Trump indicated in an interview that the US was prepared to allow economic pressure on Iran to intensify rather than escalate militarily. Market participants are also awaiting key US inflation data this week, including the release of the July consumer price index (CPI) report.

The June CPI report showed that both headline and underlying inflation eased to their lowest levels in several months. Economists expect headline inflation to slow to +3.4% y/y in July, while core inflation is forecast to ease to +2.5% y/y.