Stocks are mixed as jump in oil prices fans inflation fears

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Stock markets around the world are mixed Monday, as a jump in oil prices threatens to add upward pressure on inflation.

The S&P 500 was 0.3% higher in afternoon trading after drifting between small gains and losses through the day. The Dow Jones Industrial Average was up 323 points, or 1%, at 33,598, as of 3:15 p.m. Eastern time, while the Nasdaq composite was 0.5% lower.

The Fed has already jacked rates up at a feverish pace over the last year in hopes of undercutting high inflation. Higher rates can do that by slowing the economy, but they risk causing a recession later on. Cuts to rates also tend to act like steroids for financial markets. U.S. stocks have tended to return an average of 8% in the three months following the peak of the Fed's federal funds rate, according to Goldman Sachs. That includes six instances going back to 1982.

Short-term Treasury yields initially rose on such expectations, though they eased following the release of a disappointing report on the U.S. economy. It showed manufacturing activity in the U.S. weakened last month by more than economists expected. Less supply of oil would raise its price, as long as demand stays steady. And the weekend's announcement comes on top of a reduction announced last October, one that infuriated the Biden administration.

 

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This is nothing, the US dollar and Cnd dollar will be collapsing this year. Inflation 2.0 is around the corner.

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