Brent crude jumped 7% to $100.64 after Houthi tanker strikes. Wall Street fell 1%. The Fed's July 29 inflation reading may reflect higher gasoline costs.
Alpha Score of 49 reflects weak overall profile with strong momentum, poor value, moderate quality. Based on 3 of 4 signals – score is capped at 90 until remaining data ingests.
Brent crude touched $100.64 a barrel on Thursday, jumping 7%, after Houthi rebels claimed to have struck two Saudi oil tankers in the Red Sea. US crude rose to $91.83, up 5.8%.
Wall Street felt the pressure within minutes. The S&P 500 and Dow Jones Industrial Average each fell 1% at the open. The Nasdaq Composite dropped 1.8%.
The jump threatens the inflation progress the Federal Reserve was counting on, said Nigel Green, CEO of deVere Group. Gasoline carries significant weight in the monthly CPI data. A sustained rise at the pump would feed directly into the same inflation reading the Fed will watch on July 29.
The Bab el-Mandeb Strait, which carries around 7% of global oil supply according to Oxford Economics, is now under direct threat alongside the Strait of Hormuz.
Currency markets typically react quickly to this kind of escalation, Green noted. Safe-haven demand for the dollar has historically picked up once a crisis starts touching physical supply rather than sentiment alone.
The July 29 inflation print will show whether the oil price move has already begun to pass through to consumer prices.
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