Karaj, Iran – October 2: Zolfaghar ballistic missiles and military equipment used by the Iranian army are on display
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Hello, my name is Hui Jie from Singapore. Welcome to another edition of CNBC’s Daily Open.
Tensions are rising in the Strait of Hormuz after a Singapore-flagged ship sank in the vital waterway, with Iran saying it is ” biding its time ” before being able to attack a US warship.
Oil markets reacted to growing concerns, with prices for key commodities continuing to rise, but US President Donald Trump’s deal with Russia on diesel supplies is unlikely to have a significant impact on prices.
What you need to know today
Iran has escalated its attacks on commercial ships in the Strait of Hormuz, causing a container ship to sink in the waterway.
The Singapore-registered GFS Pride was hit by an unidentified projectile, caught fire and sank. The ship’s 21 crew members were safely evacuated and no one was injured, the Singapore Maritime and Port Authority said.
“Such attacks are unprovoked, unjustified and in violation of international law,” Singapore’s maritime authorities said in a statement on Wednesday.
A second GFS Giselle was also hit and suffered damage to its hull, but managed to reach a safe berth and its crew were uninjured, authorities added.
The Iranian government has also said it is ” biding its time ” until it is able to attack U.S. warships in the strait.
“If the Americans think the Strait of Hormuz is open, they should move closer. We look forward to sinking American warships,” Ali Ozmaei, head of the Islamic Revolutionary Guards Corps, was quoted as saying on Wednesday.
However, the U.S. military disputed Iranian claims of control, with U.S. Central Command saying that “U.S. forces and regional partners clearly control the Strait of Hormuz.”
Recent developments and additional attacks on Saudi Arabian oil giant Saudi Aramco facilities by Iranian-backed Houthi rebels have pushed up oil prices relative to international standards. brent US West Texas Intermediate rose to $106.06 per barrel, rising to $95.09 per barrel.
spike in inflation
Rising energy prices also contributed to the strong U.S. inflation report, with consumer inflation rising 3.7% year-on-year in September, above expectations of 3.6%.
The energy index rose 5.2% as tensions between the United States and Iran continue in the war that started in late February and show no signs of ending anytime soon.
Core CPI, which excludes food and energy prices, rose at an annual rate of 2.6%, compared to the expected 2.5%.
Markets fell on the news, with the S&P 500 index down 1.11% and the Nasdaq Composite Index down 1.88%. Asian markets fell on Thursday, following Wall Street’s decline.
The latest CPI statistics come as oil prices remain high, with consumers paying an average of $4.33 a gallon for gasoline, compared to about $3.08 a gallon a year ago, according to AAA.
President Trump announced last week that he would temporarily ease export restrictions on Russian diesel fuel, but analysts say the deal will do little to lower fuel prices for truckers and farmers.
technology issues
Trouble is also brewing in the tech world, as Netflix announced Wednesday it would lay off about 1,000 people, or about 6% of its workforce, according to a memo obtained by CNBC.
The layoffs will have a significant impact on product, technology, legal, and human resources teams. The layoffs come just weeks after Sarandos told attendees at the Bloomberg Screen Time conference that the company “is not growing as fast as I would like.”
AI giant OpenAI is also facing a legal quagmire, with eight US states filing lawsuits against the company on Wednesday.
The lawsuit alleges that the artificial intelligence company’s ChatGPT chatbot is a dangerous product that harms children and deceives parents.
In a release, Iowa Attorney General Brenna Byrd added, “OpenAI maintains that ChatGPT is safe while pretending to be a fake friend while giving dangerous medical advice, encouraging others to harm others, or instructing them to commit suicide.”
G20 Heavyweight Tournament
G20 finance ministers and central bank governors will meet on the sidelines of the IMF and World Bank annual meetings in Bangkok on Thursday, but US Treasury Secretary Scott Bessent will be absent from the meeting.
The United States holds the G20 Presidency this year, and the question is how much will be accomplished before the summit is held in Miami again in December.
— Lim Hui Jie, Anique Bao
And finally…
Scott Bessent’s growth plan won’t be enough to curb soaring deficit and debt mountain, IMF chief says
The head of the International Monetary Fund has urged Treasury Secretary Scott Bessent to reduce the budget deficit, warning that his plan to rely on growth to rein in U.S. government debt is not enough.
“Growth will certainly help, but it will not bring about the necessary adjustments quickly enough,” Managing Director Kristalina Georgieva said Wednesday during a panel discussion at the IMF/World Bank annual meeting in Bangkok. “Some (financial) measures will be needed.”
Georgieva said Bessent recognizes that the federal deficit and overall debt have grown “excessively” and that measures are needed to improve the fiscal balance and reduce debt. But “authorities are relying heavily on strong U.S. growth,” he said.
— Anique Bao
