High oil prices knock down stocks and erase Wall Street’s hopes for a cut to interest rates Another surge in oil prices sent stock markets tumbling on Friday, wiping out optimism about potential interest rate cuts by the Federal Reserve this year. The S&P 500 fell 1.5%, marking its fourth consecutive week of losses, the longest such streak in over a year. The Dow Jones Industrial Average dropped 443 points, or 1%, while the Nasdaq composite plunged 2%. The market’s decline intensified as oil prices rebounded sharply, with Brent crude rising 3.3% to $112.19 per barrel and U.S. crude gaining 2.3% to $98.32. Higher oil prices, combined with rising bond yields, weighed heavily on investor sentiment. Treasury yields climbed as concerns grew that the war with Iran could lead to prolonged high energy prices, fueling inflation. Traders have largely abandoned bets that the Federal Reserve will cut interest rates this year, according to data from CME Group. Some analysts now speculate the Fed might raise rates in 2026, a scenario previously deemed unlikely. Ann Miletti, head of equity investments at Allspring Global Investments, warned that a rate hike would “shake the market,” but noted that sustained high oil prices could force the Fed to avoid tightening policy. Lower interest rates, which have been a key demand from President Donald Trump, were once seen as a tool to stimulate the economy. However, investors now view rate cuts as risky for inflation, with central banks globally maintaining steady rates. The Fed, European, Japanese, and British central banks all kept interest rates unchanged this week. Oil prices have fluctuated dramatically since the war began, rising from around $70 per barrel to over $119.50 this week.#s_p_500 #donald_trump #federal_reserve #allspring_global_investments #super_micro_computer
