Global oil prices skyrocket after Israel attacks Iran
Global oil prices skyrocketed after Israel launched a strike against Iran, escalating fears of wider conflict in the Middle East.
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As the Israeli-Iran conflict appears to be included for now, US stocks have been opened up higher, even if oil prices eased from highs.
At 9:33am ET, the Blue Chip Dow added 0.6%, or 252.55 points, to 42,450.34. The Broad S&P 500 scored 0.73% (43.60 points) at 6,020.57. And the high-tech Nasdaq rose to 0.91% (177.41 points) to 19,584.24. The benchmark’s 10-year financial yield rose to 4.432%. Oil fell 1.80% per barrel to $71.67.
Oil prices have been extended after Israel temporarily knocked out its natural gas processing facilities and targeted fuel storage tanks during a weekend strike as part of its campaign against Tehran’s nuclear program. The oil jumped the most three years last week when Israel first attacked Iran and Iran.
Iran is considering closing the Strait of Hormuz, the senior commander said, but analysts were skeptical that this would happen, and oil prices have recepped.
“The closure of Hormuz is a low-risk event as Iran undermines its unique economic and political position by irritating its key clients,” said Natasha Kaneva, head of global commodity research at JP Morgan in a note later last week. “Top players in the Middle East have strong incentives to maintain conflict, taking into account the economic transformation currently being planned and implemented in the Gulf region.
President Donald Trump has also warned Iran not to touch our targets, or it could face “full strength and strength” of the US military.
“There is no indication that it will swirl into wider regional conflicts. It continues to lock in geopolitical concerns,” the stock market is backed.
Investors shrugged the mixed manufacturing report this morning. A New York Federal Reserve survey found that company managers were optimistic about the future, but factory activities in the New York area slipped further in June.
Oil prices, inflation and the Fed
The Federal Reserve will meet this week to discuss monetary policy, including interest rates. As the Fed concludes its two-day policy meeting in the middle of the week, few people predict a rate reduction, according to the CME Fed Watch tool, which tracks the odds that the market places on rate movements at each Fed meeting.
Last week’s inflation data has been cooler than expected, and the labor market is weaker, but not a crater. This combination is awaited by the Fed, especially amid a great deal of uncertainty regarding tariffs and now Israeli-Iran conflict.
Inflation could recover if the Israeli-Iran conflict spikes oil prices. Since oil prices account for about half the price of a gallon, one of the first to be affected by a rise in oil prices is pump prices. However, oil also affects the cost of producing and transporting goods to local stores. So even consumers who don’t drive or use public transport will eventually feel some form of more expensive oil squeezes.
Corporate News
- Japanese Steel will complete its purchase of US Steel after reaching a national security agreement with the Trump administration. US Steel shares rose 5.06%.
- Victoria’s Secret Stock added 3.13% after activist investors acquired shares in retailers and updated the board to the company, refocusing the core bra business.
- Roku has inked an exclusive partnership with Amazon, allowing advertisers to reach around 80 million US households through the Amazon platform. Roku stocks jumped to 11.56%.
Cryptocurrency
According to a social media post by Michael Saylor, the company’s founder and executive chairman, the strategy bought 10,100 Bitcoin at $104,080 per Bitcoin for around $1.05 billion.
One of Bitcoin’s biggest fans, Saylor reportedly met with Pakistan’s Finance Minister Muhammad Orangzeb and State Minister Bilal bin Sakib, exploring how Pakistan can add Bitcoin to its sovereign reserves and long-term financial strategy.
Bitcoin last increased by 0.92% to $106,614.70
(This story has been updated with new information.)
Medora Lee is a money, market and personal finance reporter for USA Today. mjlee@usatoday.com and Subscribe to our free daily money newsletter Personal finance tips and business news every Monday to Friday.