Brent crude climbs above $100 as Middle East tensions pressurize markets
Brent oil rose to $101 per barrel after attacks on Saudi tankers, while higher energy costs contributed to a decline in U.S. equities, led by drops in Tesla and Alphabet shares.
Brent crude reached $101.20 a barrel on Thursday, its highest level since May, after two Saudi oil tankers were hit in the Red Sea, raising concerns about disruptions to a key shipping route.
The surge in oil prices added pressure to the U.S. stock market, where the S&P 500 fell 1.3% and the Nasdaq slipped 2.3%, marking the index's first consecutive weekly loss since March. Tesla shares dropped 14.2% after reporting quarterly earnings below expectations, and Alphabet fell 6.5% despite posting stronger profit and revenue, as investors weighed the company's expanding AI-related capital spending.
Higher fuel costs also weighed on airlines; American Airlines and Southwest Airlines each posted better-than-expected earnings but saw their stocks decline 7% and 5.3% respectively.
The rise in oil prices pushed the 10-year Treasury yield to 4.70%, up from 4.67% the day before, and contributed to higher mortgage rates. Gasoline averaged $4.09 per gallon nationwide, according to AAA.
Investors are watching central-bank policy closely. The European Central Bank left rates unchanged, while market participants see the probability of a Federal Reserve rate hike next week rise to about 36% from roughly 12% a week earlier.
International markets mirrored the U.S. trend, with European indices falling and South Korea’s Kospi gaining 4.4% earlier in the session.