US Stocks Plummet as Oil Prices Soar Ahead of Inflation Data
The US stock market closed lower on Tuesday as oil prices surged, casting doubt on the possibility of rate hikes. The S&P 500 dropped by 0.3%, while the Nasdaq 100 and Dow Jones Industrial Average fell by the same margin. The Russell 2000, which tracks small-cap stocks, was an exception, rising by 0.3%.
The rise in oil prices is a major concern for investors, as it could lead to higher inflation rates. The US Energy Information Administration raised its crude oil and motor fuel price projections following Middle East supply constraints. US West Texas Intermediate crude futures settled at $82.13 per barrel, while Brent crude futures rose to $87.72.
Investors are eagerly awaiting the release of July's consumer price index data on Wednesday. Economists surveyed by Dow Jones predict a minor uptick in monthly inflation, with a 0.1% increase in the headline figure and a 0.2% gain in the core metric. A resolution to the Middle East conflict could provide an additional boost to sentiment, according to Jeffrey Roach at LPL Financial.
Several companies made notable announcements on Tuesday. Oracle Corp. (ORCL) and quantum hardware maker Quantinuum (QNT) partnered to accelerate the commercial deployment of hybrid quantum-classical computing on Oracle Cloud Infrastructure. Curaleaf Holdings (CURLF) unveiled a $4-per-share takeover proposal for Aurora Cannabis (ACB), while Nvidia (NVDA) released its Nemotron 3.5 Lightning AI model.