Business & Finance
Oil Prices Surge Past $100 a Barrel Amid U.S.-Iran Tensions as Markets React
Oil prices climbed sharply on Wednesday, with Brent crude briefly topping $100 a barrel, as escalating tensions between the United States and Iran raised fears of further disruptions to Middle East energy supplies. By 3:35 a.m. ET, Brent crude futures had risen 2.13% to $100.02 a barrel, a level not reached since July. West Texas Intermediate futures for October delivery also rose, gaining 1.75% to $94.66 a barrel.
The increase followed a U.S. military strike that destroyed five Iranian crude oil tankers on Tuesday. U.S. Central Command said the action was taken in retaliation after Iran's Revolutionary Guard fired ballistic missiles at an American warship on two occasions in recent days. The U.S. warship evaded the attacks, and no American personnel were harmed, according to Centcom. The military also stated that an unmanned submersible reportedly seized by Iran in the Strait of Hormuz was defective and contained no sensitive data or classified equipment.
The rise in oil prices weighed on U.S. equities during Tuesday's session, the first trading day of a holiday-shortened week following Monday's Labor Day closure. The Dow Jones Industrial Average fell 1.2%, its worst single-day performance in nearly three weeks. The S&P 500 dropped 0.6%, while the Nasdaq Composite slipped 0.3%. The yield on the 10-year U.S. Treasury note briefly exceeded 4.8%, as rising oil prices intensified inflation concerns and added pressure on stocks.
Kara Murphy, chief investment officer at Kestra Investment Management, described the situation as "a little bit of a speed bump" on CNBC's "Closing Bell," noting that with fewer corporate earnings reports to focus on, markets have shifted attention toward geopolitical and economic risks. No major economic data or earnings releases are scheduled for Wednesday, though investors are awaiting upcoming inflation reports later in the week for clues on the Federal Reserve's interest rate path.
In Asia-Pacific trading, markets were mixed. Japan's Nikkei 225 slipped 0.19% to close at 65,142.78, while South Korea's Kospi gained 1.40% to 7,051.64. Australia's S&P/ASX 200 fell 0.11% to 8,911.40. Hong Kong's Hang Seng index dropped 0.26% in late trading, while mainland China's CSI 300 rose 0.30% to close at 4,572.60. Chinese economic data released Wednesday showed producer inflation for August at 3.8% year-over-year, exceeding forecasts of 3.6%, while consumer inflation matched expectations at 0.8%. Economists attributed much of the uptick to favorable base effects and rising commodity costs rather than a genuine strengthening in domestic demand, noting that effects from Beijing's consumption-boosting measures are fading.
European markets opened lower on Wednesday, with the Stoxx 600 down 0.49% amid a mixed sector performance. Energy stocks gained 0.85% as oil prices approached the $100 mark, while retail, travel and leisure, and banking stocks declined. The UK's FTSE 100 fell 0.23%, Germany's DAX slipped 0.42%, France's CAC 40 lost 0.58%, and Italy's FTSE MIB dropped 0.95%.
In corporate news, shares of Danish offshore wind company Ørsted fell 1.9% after major shareholder Andel Holdings announced plans to sell approximately 3 billion Danish kroner ($467.1 million) of its stake. The sale will reduce Andel's holding from 5% to about 3.3%, though it will remain Ørsted's third-largest shareholder. The move comes a year after Andel participated in a 60 billion Danish kroner rights issue by Ørsted.
Among after-hours movers, ServiceTitan shares fell 19% after the software company issued current-quarter revenue guidance slightly below analyst expectations, despite beating estimates in the most recent quarter. Casey's General Stores dropped 10% even after surpassing first-quarter expectations, as the company projected inside same-store sales growth of 2% to 5% for the fiscal year. Mission Produce shares rose 7.5% after the avocado producer exceeded all analyst estimates for both earnings per share and revenue in its fiscal third quarter.