Oil prices jumped more than 4% on Wednesday, driven by escalating geopolitical tensions in the Middle East. The surge came as reports highlighted two separate flashpoints: a clash involving Iran and Jordan, according to Fortune, and a U.S.-Saudi attack on Iran-backed militias in Iraq, as reported by MarketWatch. West Texas Intermediate and Brent crude front-month contracts both climbed on the risk of further fighting.
Meanwhile, the Federal Reserve is widely expected to keep interest rates unchanged at its meeting Wednesday. However, 76% of traders now anticipate a rate hike in September, as inflation remains above the central bank's 2% target, according to Fortune. The combination of rising oil prices and sticky inflation is complicating the Fed's policy outlook, with some analysts warning that prolonged conflict could add upward pressure on consumer prices.