Oil prices have climbed to a two-month peak, hitting $66 per barrel. This jump is fueled by ongoing geopolitical tensions and a modest recovery in demand, resulting in a strong rally after a period of subdued prices.
Since early May, oil has gained nearly 20%, marking a notable rebound—even as OPEC+ has ramped up production. Despite increased supply, prices have continued to rise, which has lifted market sentiment about the sector’s prospects.
While last year’s elevated oil prices mean year-over-year inflation comparisons still benefit from a high base effect—helping to keep headline inflation in check for now—month-to-month price increases are likely to level off. However, if oil continues its upward trajectory, it will make it even harder for the U.S. Federal Reserve to justify any interest rate cuts. The S&P 500 is approaching 6,147, just about 125 points away.
Anticipate a fall as widespread bullish sentiment and oil prices hitting a two-month high complicate the Fed’s ability to cut interest rate
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