US stocks today: US stocks slip as oil tops $100, putting inflation back in focus

US stocks slipped on Thursday as investors turned cautious ahead of key inflation data, while oil prices climbed further above $100 a barrel, raising fresh concerns about inflation just as markets assess the outlook for interest rates, Reuters reported.

Brent crude rose 3.8% to around $105 a barrel after crossing $100 on Wednesday for the first time since July. The latest jump came as the Iran conflict escalated, increasing fears that a prolonged disruption could add to price pressures across the global economy.

The Dow Jones Industrial Average was down 0.33% shortly after the open, while the S&P 500 fell 0.56% and the Nasdaq Composite declined 0.97%. MSCI's gauge of stocks worldwide was down 0.69%.


The focus now shifts to US inflation data, with producer prices due on Thursday and consumer inflation figures expected on Friday. The data could influence expectations ahead of the Federal Reserve's September 15-16 policy meeting.

A majority of economists polled by Reuters expect the Fed to keep interest rates unchanged at the meeting and for the rest of the year.

Oil puts inflation back in the spotlight

The rise in crude prices is particularly significant because it comes at a time when bond yields in major economies are already elevated. Higher energy costs could make the inflation outlook more difficult if the oil rally persists.

"I think that Brent pushing through the $100 level will be seen by many in the market as a significant event in the current scheme of things," said Nick Twidale, chief market strategist at ATFX Global.

Twidale said traders who had been waiting for a Middle East peace deal may now "hit the trigger as the realities of a longer conflict kick in."

Bond markets were also under pressure. Germany's 10-year bond yield held at 3.45%, its highest since the euro zone crisis in April 2011, while France's equivalent yield reached another post-2008 high of 4.35%.

In the UK, 10-year and 20-year yields remained near their respective post-2007 and 1998 highs at 5.26% and 5.87%. The benchmark 10-year US Treasury yield rose to 4.91%.

Investors weigh rates and fiscal policy

The European Central Bank raised its key interest rate to 2.50% from 2.25%, although the widely expected move had little impact on European stocks or the euro.

US investors were also digesting signs of potentially looser fiscal policy. President Donald Trump promised a $5,000 "Trump dividend" for every US adult if his party wins November's congressional elections.

The Treasury's announcement of a $6 billion buyback of longer-dated US bonds also drew attention, although it disappointed some investors.

"Bessent has laid down the gauntlet to a group of sophisticated traders who don't like to be told what to do," said Matt Simpson, senior market analyst at StoneX.

"He may win a battle or two, but he'll only win the war if bond traders let him."

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)