Surging Oil Prices and Plummeting AI: The Real Variables in New York
By ATTN Desk · Editorial oversight: Sean Han
On Monday, July 13 local time, New York stocks closed mixed. The S&P 500 fell 0.8%, the Nasdaq dropped 1.6%, and the Dow declined 0.3%.
The main negative factor was a reassessment of tensions in the Middle East. Oil prices jumped 3–4% on U.S. and Iranian airstrikes and fears of a Strait of Hormuz blockade, stoking inflation resurgence fears. Rising oil prices pushed up U.S. Treasury yields, creating a headwind for growth stocks.
In particular, semiconductor and related stocks, which had driven the AI rally, all underwent a correction, deepening the Nasdaq’s weakness, while energy shares, in contrast, showed strength.
On the policy front, the Fed has left open the possibility of further rate hikes, citing recent upside risks to inflation, leaving markets on edge over whether oil-driven inflation could translate into renewed rate increases.
However, this week’s start of the Q2 earnings season and the June Consumer Price Index (CPI) report on July 14 are the events that will truly set the direction. For investors, the key is to see whether energy prices, long-term yields, and earnings guidance in the financial and AI sectors improve together.