Brent crude climbed 0.6% to $84.04 a barrel, a direct response to the persistent instability in the Middle East. Despite Iran’s claims that negotiations with Oman over shipping lanes are nearing completion, Tehran insists the waterway will remain restricted until U.S. conditions are met. This geopolitical deadlock looms over markets even as corporate earnings remain remarkably resilient.
In the U.S., the focus shifts to Wednesday’s consumer price report. Current forecasts suggest a 0.1% rise in headline inflation, with core inflation expected at 0.2%. Michael Feroli, chief economist at JPMorgan, noted that while current prints may not trigger an immediate Federal Reserve move, consistent figures near 0.3% could force a September rate hike. Traders have already priced in a 45% probability of such a move, down from 67% just a week ago.
Corporate performance continues to provide a buffer for equities. With 90% of S&P 500 companies reporting, earnings per share are up 30% year-over-year, excluding specific investment gains. AI-linked firms remain the primary engine of growth, posting median EPS increases of 28%. JPMorgan analysts have responded to this strength by lifting their S&P 500 year-end target to 8,000, though they caution that AI-related earnings growth may cool to 16% next quarter. As bond yields stabilize, gold is holding near record highs at $4,333 an ounce, reflecting a market caught between the optimism of a dovish Fed pivot and the persistent threat of energy-driven inflationary shocks.
Comments (0)
No comments yet. Be the first!