Oil jumps despite Trump’s pledge not to hit Iran

Oil prices rose about 4% on Thursday, Oct. 8. Traders were reacting to more attacks on shipping in the Strait of Hormuz and to reports that the White House had considered new strikes on Iran before the midterm elections. President Donald Trump later said the US would not attack Iran before the vote, and crude gave back some of its gains. Brent closed at \$104.28 a barrel, up 4%, and US crude settled 3.6% higher at \$91.49, according to NBC News.nbcnews

On Wall Street, the Nasdaq Composite fell the most of the major indexes, with chipmakers leading the decline. The S&P 500 also slipped, while the Dow Jones Industrial Average ended roughly flat. Energy was the best-performing sector, and technology was the worst, Reuters reported.rmb.reuters

A pledge that didn't calm the market

The Atlantic reported on Wednesday that the White House had asked the Pentagon to draw up options for striking sites in Iran ahead of the Nov. 3 elections. Trump also told reporters late Wednesday that strikes were under consideration, according to CNBC. On Thursday he changed course in a Truth Social post: "We will not be attacking Iran at any time prior to the midterm elections to be held in the United States on November 3rd," adding that the two sides were having "productive discussions". He said the US naval blockade of Iranian ports would stay in place.iol+3

The market shrugged off the post after a short dip. Brent had climbed close to \$106 earlier in the session. Traders were also watching reports of attacks by Iranian proxies in Saudi Arabia and hurricane-related production cuts in the Gulf of Mexico. US crude is up more than 60% this year as the war has tightened global supply.rmb.reuters+1

Rate-hike fears weigh on stocks

Higher oil prices pushed bond yields up. The 10-year Treasury yield touched about 5.35%, close to its highest level since 2002. In Istanbul, Fed Governor Christopher Waller said: "If the economic data continue to come in as expected, I anticipate additional hikes to support a timelier return of inflation to our 2% goal." He added that the increases "do not need to come at consecutive meetings". The Fed raised rates in September for the first time since July 2023. CME's FedWatch tool put the odds of a December hike at 69.2%.swissinfo+2

Chips lead the decline

Chip stocks, which have gained more than 80% this year, fell 3.4%. The drop followed a Financial Times report that OpenAI's annualized revenue was \$20 billion lower than the company had previously signaled. Micron ↘ 0.66%, Broadcom ↗ 0.39% and Oracle ↗ 4.21% all fell. On Wednesday, The Wall Street Journal News Corp ↗ 0.28% reported that Broadcom was arranging \$50 billion in financing for OpenAI, adding to worries about heavy tech borrowing.rmb.reuters

"The market's going sideways in anticipation of third-quarter earnings season, which begins next week, and then there's the ongoing conflict in Iran that's pushing oil prices higher," said Terry Sandven of US Bank Wealth Management.rmb.reuters