Brent’s surge above $100 pushes US stocks lower

US stock indexes fell on Wednesday as oil prices climbed and Brent crude surpassed $100 a barrel for the first time since July amid escalating tensions in the Middle East.

In trading, the Dow Jones Industrial Average fell 357.08 points, or 0.68%, to 52,428.99, while the S&P 500 declined 21.78 points, or 0.28%, to 7,651.74. The Nasdaq Composite dropped 91.46 points, or 0.35%, to 26,329.95.

Traders are struggling to look past the fallout from the seven-month war between the United States and Iran, which has fueled concerns that the conflict could spread to other parts of the region.

Brent crude remained above $100 a barrel after crossing the psychological threshold for the first time in more than six weeks, following Iran’s announcement that it had launched ballistic missiles at a US base in Jordan.

There were also reports of vessels being attacked by both sides, adding to concerns over oil supplies from the region.

Energy was the only sector in the S&P 500 to post gains, rising 1.7%.

Markets currently see a 60.2% probability of a 25-basis-point interest rate hike when the US central bank meets next week, according to CME FedWatch data.

Inflation data in focus

Investors are now awaiting the US Treasury Department’s announcement on its bond buyback program later in the session, following its announcement several weeks ago that it would increase purchases of long-dated bonds to curb rising yields.

Such announcements typically include a list of securities eligible for repurchase. However, JPMorgan analysts said in a note that “some market participants are looking to this announcement for confirmation on the size of the Treasury’s purchases.”

Any reaction in bond markets could affect stocks, which typically come under pressure when yields on risk-free government bonds rise.

Attention will also focus on the Consumer Price Index report due on Friday and Producer Price Index data scheduled for Thursday for clues about the Federal Reserve’s next steps on interest rates.