New York – Oil markets are tightening, with Brent crude climbing to $97.54 a barrel, up 0.6% after briefly touching $99.46. The rise reflects intensified fighting in the Middle East, which has limited global oil flow since early July.
The surge in oil costs is adding fresh pressure to inflation concerns that affect families and businesses across the country. Later this week, the Commerce Department will release the August wholesale price index, which economists expect to rise to 5.4% from July’s 4.7%. The consumer‑price report due Friday is projected to show a modest easing to 3.3% from 3.4%, yet both figures remain well above the Federal Reserve’s 2% target.
These inflation updates arrive just before the Federal Reserve’s policy meeting on September 16, where the central bank will decide whether to raise, cut, or hold the federal funds rate. Traditionally, a high‑inflation environment prompts the Fed to increase rates, a move that can slow borrowing, dampen investment, and help rein in price growth.
President Donald Trump, however, is actively lobbying for lower interest rates, arguing that a more accommodative stance would give the economy an extra boost and help bring down inflation faster. The President’s position aligns with many small‑business owners and families who feel the weight of higher borrowing costs.
Fed Chair Kevin Warsh has signaled a desire to provide markets with fewer clues about short‑term rate direction, adding uncertainty to the outlook. Nonetheless, CME Group data shows traders assigning a 60% probability that the Fed will raise rates at the September meeting.
Bond markets are reflecting the tension. The yield on the 10‑year Treasury note inched up to 4.79% from 4.78%, hovering near its highest level since the fall of 2023. Higher yields increase pressure on companies to grow earnings to sustain stock prices.
Wall Street reacts to oil and earnings news
U.S. equity indexes slipped on Tuesday. The S&P 500 fell 0.4%, the Dow Jones Industrial Average dropped 575 points (1.1%), and the Nasdaq Composite slipped 0.1% by noon Eastern time.
Company‑specific news added to the market’s wobble. Boston Scientific fell 4.8% after a summer‑time cyber‑security outage disrupted its network, casting doubt on its ability to meet third‑quarter sales and profit forecasts. The firm said it is working to recover revenue, fulfill orders, and clear backlogs, but the full impact remains unclear.
Swiss drugmaker Novartis saw its U.S.‑listed shares tumble 13.9% following a discouraging update on a study of a therapy for myotonic dystrophy type 1, a rare neuromuscular disease.
On the brighter side, Qualcomm rose 3.8% after announcing a partnership with Amazon to supply chips for large‑scale AI data centers. The deal also grants Amazon the option to purchase up to 25 million Qualcomm shares at $161.26 each.
International markets feel the ripple
Japan’s Nikkei 225 slipped 1.7% as a stronger yen hurt exporters like Toyota and Panasonic, which must translate U.S.‑dollar sales back into yen. The Bank of Japan is slated to meet next week, and speculation is rising that it may raise rates.
In China, Hong Kong’s index fell 0.4% while Shanghai’s rose 0.2% after the world’s second‑largest economy reported a 25% year‑on‑year jump in August exports, driven by strong demand for automobiles and high‑tech goods.
Overall, the combination of rising oil prices, persistent inflation, and divergent views on monetary policy is keeping investors cautious. President Trump’s push for lower rates reflects a broader effort to protect American families and businesses from the drag of higher borrowing costs while the administration continues to prioritize economic growth and energy security.
Original reporting: 2news.com — read the source article.
