Global Markets Wobble as Oil Surpasses $100 Again

The main indices on Wall Street fell in pre-market trading this Wednesday, due to renewed fears about the impact that rising oil prices may have on the global economy. Additionally, Friday will see the release of the inflation data for the U.S., which will set the stage for next week's meetings of central banks in the U.S. and Japan.

Oil prices accelerated their rise this Wednesday, with Brent crude surpassing $100 per barrel again, following intensified fighting in the Strait of Hormuz, a key trade route for global energy supply.

Brent crude rose 3.1% to $100.01, surpassing the $100 threshold for the first time since May of this year. West Texas Intermediate (WTI) crude increased by 3.3% to $95.94.

Prices have risen nearly 20% since the middle of last week, coinciding with a new escalation of fighting around the world's main oil choke point. This is also the first time since July 23 that oil has reached the $100 mark.

The U.S. Central Command reported that its forces destroyed five Iranian tankers transporting crude oil on Tuesday, after the Iranian Revolutionary Guard launched ballistic missiles at a U.S. Navy warship twice within two days.

The escalation of attacks has heightened concerns about global energy supply, as more than one-fifth of the crude traded in the world passes through the Strait of Hormuz. This also impacts investor sentiment: European stock markets are trading lower, and Wall Street futures anticipate a negative session.

International markets did not take long to feel the impact. In Europe—an area heavily reliant on energy imports—the Euro Stoxx fell 1.68%. Locally, the German DAX dropped 1.69%, and the French CAC followed with a decline of 1.87%. Outside the Eurozone, the UK's FTSE retreated 1.34%.

The European Central Bank (ECB) will decide tomorrow the direction of its monetary policy, with the market projecting a new increase in the benchmark rate by the monetary authority.

In China, the Hang Seng in Hong Kong fell 0.17%, while the Shanghai stock exchange rose 0.28%. Meanwhile, the South Korean Kospi jumped 1.40%, and the Japanese Nikkei 225 fell 0.19%.

Another focal point in the markets has been the strong appreciation of the Japanese yen during recent sessions, amid rumors of a new intervention by the Japanese government and statements from U.S. Treasury Secretary Scott Bessent against those speculating against the value of the Japanese currency.

Bessent challenged market operators to test their determination to strengthen the Japanese currency, stating that when he intervenes in the markets these days, he does so effectively with insider information. "I am the house now," he declared.

In this context, the index that groups the most important companies on the New York Stock Exchange, the S&P 500, fell 0.28%, while the Nasdaq Composite, focused on the tech sector, declined 0.43%. Meanwhile, the industrial index Dow Jones moved down 0.49%.

The stocks with the largest gains in the S&P 500 are Meta (+6%), Akamai (+3%), and Micron (+3%). On the opposite side, the largest declines are seen in Tractor Supply (-4%), Enphase (-4%), and Booking (-4%).

Meanwhile, the yields on U.S. Treasury bonds—the thermometer of the global economy—are mixed, with slight increases in the 2 and 5-year segments, while in the 10 and 30-year counterparts, there are declines of up to 0.5% in those yields.