Rising Oil Prices Weigh Heavily on US Stocks
The US stock market fell on Tuesday as rising oil prices weighed heavily on Wall Street. The S&P 500 dropped 0.6%, while the Dow Jones Industrial Average plummeted 628 points, or 1.2%. Meanwhile, Brent crude briefly surged to $99.46 before settling at $97.92, up 0.9% from its early July price of around $72.
The increase in oil prices has exacerbated concerns about inflation, with economists expecting the wholesale inflation rate to accelerate to 5.4% in August, up from 4.7% in July. The more closely watched consumer price index (CPI) report is due on Friday and is expected to show a slight easing of inflation to 3.3%, still above the Federal Reserve's 2% target.
The Fed's decision on interest rates next week will be heavily influenced by these inflation numbers, with traders betting on a nearly 60% probability that the Fed will raise its federal funds rate at the conclusion of its meeting on September 16. However, President Donald Trump has been lobbying for lower interest rates instead.