
Oil prices extended their rally as escalating Middle East tensions heightened fears of a major supply disruption, with Brent rising above $112 and WTI approaching $100.
Continued attacks on energy infrastructure are deepening supply shock concerns, keeping oil prices elevated and increasing risks to global energy markets.
Yesterday, The Federal Reserve held interest rates steady at 3.5%–3.75%. Despite slightly stronger growth forecasts, the Fed raised its inflation outlook and acknowledged uncertainty tied to rising oil prices. The updated dot plot signals just one rate cut expected this year, fewer than previously anticipated, with inflation pressures delaying easing expectations.
U.S. stock futures edged lower in early trading today after a sharp sell-off yesterday, where Nasdaq-100 and S&P 500 both dropped 1.6%, and the Dow Jones fell to a new 2026 low at 46,053, driven by rising inflation fears and surging oil prices.
The decline followed a hot producer inflation report and concerns that the Iran war could lead to stagflation, reducing expectations for near term Fed rate cuts.
Gold struggles to recover from recent lows near $4,800, finding limited support from a pause in US dollar strength and ongoing geopolitical tensions in the Middle East.
Overall, while geopolitical risks provide support, strong USD and higher inflation expectations continue to limit gold’s rebound, with markets awaiting further central bank decisions and US economic data for direction.
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