Oil Breaches $100 Per Barrel, Sending US Stocks Lower
US stocks are expected to open lower on Wednesday as oil prices breach $100 per barrel for the first time since July, amid rising tensions in the Middle East. The surge in oil prices has lifted inflation concerns and is pushing Treasury yields higher ahead of this week's inflation data and next week's Federal Reserve rate decision.
The market is now pricing in a 60% probability that the Fed will hike rates in September, which could dampen market sentiment and risk appetite. Energy stocks are pushing higher as Brent crude tops $100 a barrel, with the XLE ETF gaining around 1%. Meanwhile, Apple shares are slightly lower ahead of an event where the company is expected to announce new iPhones.
The Dow Jones has broken below its rising trend line support and its 50 EMA, which could lead to further downside. Sellers will look towards 52,000, the round number, and the 100 EMA at 51,830 before turning attention to 51,500, the July low.