Oil prices jump following US attack on Iran, stocks pull back

Oil prices climbed on Thursday after renewed U.S. strikes in Iran raised fears of disruptions to shipping through the Strait of Hormuz. Brent crude rose more than 3% to $97.30 per barrel, while WTI crude gained 3.4% to $91.72.

Yesterday, Wall Street closed at record highs, with the Dow Jones and S&P 500 reaching fresh records as falling oil prices supported sentiment. Technology stocks continued to lead gains. However, in early trading today, U.S. stock futures moved lower as investors awaited the release of the Federal Reserves preferred inflation measure, the PCE price index.

The decline comes as renewed tensions in the Middle East strengthened the U.S. dollar and reduced demand for gold despite ongoing geopolitical risks.

At the same time, recovering oil prices have increased concerns about higher inflation, leading investors to expect a more hawkish stance from global central banks, including the Federal Reserve. Markets are now pricing in a growing possibility of future U.S. rate hikes, which has pushed Treasury yields and the U.S. dollar higher, both negative factors for non-yielding assets like gold.