Wall Street benchmarks traded close to record levels on Tuesday as investors awaited fresh inflation data, while oil prices remained volatile amid continued uncertainty over when the conflict with Iran would allow crude exports to resume freely, Business Today reported. The S&P 500 was little changed, hovering near the all-time high it reached on Friday. By 9:35 a.m. Eastern time, the Dow Jones Industrial Average had gained 101 points, or 0.2%, while the Nasdaq composite edged down 0.1%.
Inflation data takes centre stage
Investors are now focused on Wednesday's release of the latest US inflation data. Economists expect the report to show that inflation remained elevated in July but eased slightly to 3.4% from 3.5% in June, according to an AP report cited by Business Today.
Business Today reported that a moderation in inflation would ease pressure on the Federal Reserve, whose policymakers remain divided over whether further interest rate increases are needed to contain price pressures.
Although higher borrowing costs can help curb inflation, they also slow economic activity by making loans more expensive for US consumers and businesses. Rising interest rates also tend to weigh on equity markets and other investment assets, the report noted.
According to CME Group data, traders currently see a slightly better than 50% chance that the Federal Reserve will raise its benchmark interest rate at its September policy meeting. If that happens, it would mark the first rate increase in more than three years and could draw criticism from President Donald Trump, who has repeatedly called for lower interest rates.
Treasury yields have climbed since the outbreak of the war with Iran as higher oil prices fuelled concerns over inflation, pushing long-term US mortgage rates to their highest level in a year. The yield on the benchmark 10-year US Treasury note edged lower on Tuesday to 4.68% from 4.72% at Monday's close. Even so, it remains significantly above the 3.97% level recorded before the conflict with Iran began.
Corporate earnings support markets
Among individual stocks, Cardinal Health rose 8.1% after reporting spring-quarter earnings that exceeded analysts' expectations, becoming the latest major US company to deliver stronger-than-expected results. Aramark, the food services and facilities management company, gained 8.3% after posting quarterly profit and revenue that came in ahead of analysts' estimates. Corporate earnings have consistently surpassed market forecasts, a trend welcomed by investors as stock prices generally track profit growth over the longer term.
Intel expands stock sale for AI push
Those gains helped offset a 0.5% decline in Intel shares after the company announced plans to increase its stock sale to $20 billion at $95 per share, up from the $15 billion offering announced a day earlier. Such share issuances dilute the ownership stake of existing shareholders. Intel said it intends to use the funds raised to invest in opportunities created by the rapid growth in demand for artificial intelligence technology.
Oil prices swing on Iran conflict
Oil prices saw much sharper movements. Brent crude briefly climbed above $90 a barrel during morning trade before retreating, and was last quoted at $87.18 a barrel, down 0.6% from Monday's closing level. Such volatility has become a recurring feature of the oil market since the United States and Israel launched attacks on Iran in late February, triggering the closure of the Strait of Hormuz and disrupting the movement of a large share of the world's crude supplies from the Middle East. During the previous month alone, Brent crude fluctuated between $72 and $102 a barrel.
The rise in crude prices has intensified inflationary pressures, pushing the average US price of a gallon of regular gasoline to $4.01, according to AAA. That compares with less than $3.14 a year earlier, although it is lower than last week's level of nearly $4.09.
| Metric | Level | Context |
|---|---|---|
| S&P 500 | Little changed | Near Friday's all-time high |
| Dow Jones Industrial Average | +101 pts (+0.2%) | 9:35 a.m. ET |
| Nasdaq composite | -0.1% | — |
| 10-year Treasury yield | 4.68% | Down from 4.72% Monday; above 3.97% pre-conflict |
| Brent crude | $87.18/barrel | Down 0.6%; briefly above $90 |
| US regular gasoline | $4.01/gallon | vs <$3.14 a year ago; below ~$4.09 last week |
Global markets mixed
In overseas markets, European stock indexes posted modest gains following a mixed session across Asia. Hong Kong's Hang Seng Index was among the biggest decliners globally, falling 1.1%.
The next major catalyst for global markets is Wednesday's US inflation report, which will inform the Federal Reserve's September rate decision — and, with it, the trajectory for equities, bonds and the dollar.
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