Stocks in the United States fell today as the situation in the Middle East deteriorated. Rising oil prices have sparked concerns about higher inflation and whether the US Federal Reserve (Fed) will actually proceed with interest rate cuts.
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Rising oil prices push stocks down
The Dow Jones index fell by 784.67 points, or 1.6 percent, to 47,954.74 points. The broader S&P 500 index weakened by 38.79 points, representing a decline of 0.56 percent, to 6,830.71 points. The Nasdaq technology index dropped 58.5 points, or 0.26 percent, closing at 22,748.99 points.
The expansion of the conflict to other countries has raised concerns about possible disruptions to operations in the Strait of Hormuz, one of the world’s key energy chokepoints. The price of US crude oil surged by 7.5 percent, while Brent crude rose by 4.5 percent. According to traders, prolonged supply constraints could increase inflation and slow economic growth.
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Dollar strengthens as a safe asset
Losses in stock markets were partially offset by gains in energy companies. Shares of chip manufacturer Broadcom also rose, with expectations that its artificial intelligence chip revenues could exceed $100 billion next year. Conversely, airline stocks fell due to higher fuel prices, and declines were also recorded in healthcare, industrial, and consumer goods sectors.
The US dollar simultaneously strengthened against a basket of major world currencies, as investors seek safer assets during periods of geopolitical tension. The dollar index rose by 0.3 percent to 99.06 points. The euro weakened against the dollar by 0.2 percent to 1.1604 USD, while the dollar strengthened against the Japanese yen by 0.4 percent to 157.56 JPY.
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Source: CTK
