Now Reading: Iran war keeps US inflation high, threatens Wall Street rally
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Iran war keeps US inflation high, threatens Wall Street rally
US stocks edged lower on Monday as hopes faded for an imminent deal to reopen the Strait of Hormuz, Reuters reported. The Dow fell 0.28%, the S&P 500 lost 0.09%, and the…
The Story in Brief
US stocks edged lower on Monday as hopes faded for an imminent deal to reopen the Strait of Hormuz, Reuters reported. The Dow fell 0.28%, the S&P 500 lost 0.09%, and the Nasdaq dropped 0.39%. Intel shares slid 3% after announcing a $15 billion share sale. US crude oil jumped about 5% to settle at $82.13 a barrel.
Reuters reports that the Iran war has pushed energy prices sharply higher. Oil rose more than 70% within weeks of the Strait shutdown, which stopped about 20 million barrels of petroleum daily, roughly one-fifth of global demand. Hindustan Times reports US 12-month inflation jumped from 2.4% to 4.2% between February and May. Core PCE inflation remains elevated at 3.4%, signalling the problem is spreading beyond energy.
The Indian Opinion
The usual narrative blames Trump's tariffs for inflation, but here the real culprit is a war-induced energy shock that raised oil prices over 70%. That is not a policy choice, it is a direct consequence of military conflict in a choke point. Both sides in the debate should note that core inflation has stayed high even after oil eased, suggesting sticky supply-chain costs. The test will be whether a Hormuz reopening actually brings pump prices down within a quarter, or if the damage lingers.
Sources (2): hindustantimes.com, livemint.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
