NEW YORK (AP) — Oil prices spiked again Thursday because of the war with the United States. Irantightening its grip on the global economy and causing stock markets around the world to fall.
Brent crude oil, the international standard, briefly exceeded $119 per barrel in the morning, but has since fallen to $110.80, but is still up 3.2% from the previous day. A barrel of benchmark U.S. crude oil rose 0.7% to $96.09. Iran steps up attacks on oil and gas facilities around the Persian Gulf in response to Israeli attacks on key areas. Iranian natural gas field.
The attack raised concerns that the fighting could halt oil and gas production in the Gulf region for an extended period of time, causing prices to continue to rise for some time and causing inflation to soar around the world.
Stock indexes fell 3.4% in Japan, 2.7% in South Korea, 2.7% in Germany, and 2.6% in the UK. Losses were smaller on Wall Street, where trading began after Brent oil prices pared sharp gains and where companies are less reliant on Gulf oil.
The S&P 500 fell 0.4%, continuing its fourth straight week of declines, the longest of the year. As of 10 a.m. ET, the Dow Jones Industrial Average was down 188 points, or 0.4%, and the Nasdaq Composite was down 0.6%.
with President Donald Trump countries around the world made move to stem Oil prices have skyrocketed, but most are short-term solutions as the market wants Gulf oil fields to be de-risked and cleaned up. Strait of Hormuz One-fifth of the world’s oil normally sails off the coast of Iran.
Concerns about oil prices have become so high that traders are now betting there is even a small chance the Federal Reserve will have to raise interest rates this year. It’s a dramatic turnaround from just a month ago, when traders were increasingly betting the Fed would cut interest rates multiple times this year.
Cutting interest rates would boost the economy and investment prices, something President Trump has angrily called for, but risks exacerbating inflation. Wednesday Fed I decided to refrain from cutting. Interest rates were lowered at the latest meeting, with traders finding discouraging comments from Chairman Jerome Powell about the possibility of a rate cut in 2026.
Traders are currently betting on a nearly 5% chance that the Fed will raise key interest rates by the end of the year, and about an 80% chance that they will at least keep them unchanged, according to CME Group data. Just a month ago, these same traders were betting on two or more rate cuts 74% of the time.
U.S. Treasury yields rose as a result, with the two-year bond yield reaching its highest level since the summer. The rate rose to 3.81% from 3.76% late Wednesday.
The more widely followed 10-year U.S. Treasury yield held 4.26% as of late Wednesday, up from just 3.97% before the war with Iran began. Earlier in the day, the Bank of Japan, the European Central Bank, bank of england They kept their interest rates unchanged.
In addition to the threat of higher inflation, some solid reports on the US economy also contributed to the rise in yields. one person said. Fewer U.S. workers applying for unemployment benefits Last week, economists had expected a slight increase. Another official said manufacturing growth in the Mid-Atlantic region had unexpectedly accelerated.
Besides sending mortgage interest rate And while other types of loans rise, the rise in Treasury yields also lowers the prices of all types of investments, from stocks to cryptocurrencies to gold.
Gold fell 6.6% to $4,575.60 an ounce, its lowest since early February. Silver fell further, dropping 11.9%.
The stock prices of companies that mine these metals have fallen to some of Wall Street’s heaviest losses. Newmont fell 6.7% and Freeport-McMoRan fell 6.1%.
Micron Technology led the market decline, falling 4.1%, despite reporting an explosive quarter with profits and sales that far exceeded analysts’ expectations. It has clawed back some of the steep rise of nearly 62% since the start of this year due to a global shortage of computer memory.
Helping Wall Street contain losses was Rivian Automotive, which soared 8.5%. it is, Partnership in which Uber will invest up to $1.25 billion The company plans to purchase 10,000 autonomous robotaxis. Uber Technologies rose 0.2%.
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AP Business Writers Elaine Kurtenbach, David McHugh and Matt Ott contributed.
