Oil prices rose about 4%, with tensions surrounding the Strait of Hormuz heightening supply concerns. Investors are watching inflation and central bank comments closely.
Tensions surrounding the Strait of Hormuz sent oil markets sharply higher, with Brent crude and US crude rising about 4%. Markets are focused on tensions in the Persian Gulf and supply concerns.
About 20 vessels passed through the waterway in the past 24 hours. Iran suggested it might close the strait, but the US government has denied this. The strait is reportedly open to commercial shipping.
European and Asian equities weakened alongside a stronger dollar and rising bond yields, while the Nikkei average remained near its lows and Nasdaq futures fell 0.6%.
With earnings announcements from major companies approaching, Netflix and GE are scheduled to release their results. There are also indications that increased spending related to AI could affect companies’ cash flows.
Expectations for further rate hikes by the Federal Reserve are still considered high, and Chair Warsh is scheduled to appear before Congress. June inflation data is expected to ease to around 4.2%, although a recovery in oil prices could offset this trend.