Oil prices rose on Wednesday after President Trump told reporters that he planned to attack Iran again, after the United States and Iran traded new strikes across the Middle East.
The attacks, straining a two-month cease-fire between the countries, were the latest jolt to energy markets. The war in Iran has choked the Strait of Hormuz, which normally carries as much as one-fifth of the world’s oil.
The effects of rising oil prices were evident in the latest monthly inflation report, released on Wednesday, which showed a 4.2 percent increase in consumer prices in May versus last year — the fastest pace since April 2023. The rise was driven almost entirely by energy prices, which as a category has risen 23.5 percent over the year before.
Oil climbs.
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The price of Brent crude, the global benchmark for oil, rose around 3 percent to about $94 a barrel.
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West Texas Intermediate crude, the U.S. benchmark, was up roughly 3 percent to around $91 a barrel.
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Oil prices had been wavering on Wednesday but jumped after Mr. Trump, in a social media post, appeared to threaten Iran for failing to agree to end the war. It climbed more after the president told reporters that he planned to attack again.
Stocks drop.
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The S&P 500 dropped roughly 1 percent in afternoon trading on Wednesday.
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Stocks in Asia, where countries import vast quantities of oil and gas, mostly fell. Volatility in technology stocks continued with the Kospi index in South Korea declining 4.5 percent and the Taiex in Taiwan dropping 3.3 percent. Japan’s Nikkei 225 closed 1.9 percent lower.
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In Europe, the Stoxx 600, a broad index that tracks the region’s largest companies, was flat.
Gasoline prices dip.
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Gas prices fell a penny to a national average of $4.15 a gallon, according to the AAA motor club, but since the war began, the cost for drivers has risen by 39 percent.
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Gas prices don’t move in lock step with crude, usually trailing increases or drops by a few days.
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The average price of diesel also dipped to $5.30 a gallon, but is now up 41 percent since the start of the war.
What they are saying: A ‘topsy-turvy’ week in markets.
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It has been a “genuinely topsy-turvy” week of trading thus far, Deutsche Bank analysts wrote, “with oil and tech whipsawing” markets on Monday and Tuesday.
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“Not only are we oscillating between deal or no deal with the U.S. and Iran, but markets are also swinging between 1999-style A.I. exuberance and 2000-type tech crash fears,” they noted.
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