US stocks experienced a decline for the second consecutive session, driven by an advance in oil prices that raised fears of increased inflation and higher interest rates. Brent crude approached $100 a barrel following attacks on energy facilities in Saudi Arabia, although it later pared some of those gains. Despite a rally in high-profile chipmakers, the broader market was negatively impacted by these developments.
Money markets are now pricing in over a 50% chance of a Federal Reserve rate increase this month. This sentiment comes just days before crucial inflation data is expected to be released, adding to investor anxiety. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all recorded declines in early trading on September 8th.
The surge in oil prices, specifically Brent crude reaching close to $100 per barrel (up around 35% from summer lows), was largely attributed to escalating hostilities in the Middle East. This resurgence in oil prices is making it difficult for American investors to overlook geopolitical tensions, threatening what had been a strong run for US stocks. The yen also saw significant gains, rising nearly 4% in the past week, marking its biggest week-on-week increase since July 2024.
