U.S. stocks fall as Brent crude jumps toward $110 per barrel

U.S. stocks are sinking Wednesday after another climb for oil prices raised worries about inflation, which may have been primed to worsen even before the war with Iran began.

The S&P 500 fell 0.5 per cent and was on track for its first loss this week. The Dow Jones Industrial Average was down 377 points, or 0.8 per cent, as of 11 a.m. Eastern time, and the Nasdaq composite was 0.5 per cent lower.

Stocks fell under the pressure of a 6.2 per cent climb for the price of a barrel of Brent crude, the international standard, to US$109.84. Benchmark U.S. oil rose 2.3 per cent to $97.70 per barrel.

Oil and natural gas prices have been spiking since the war began because of disruptions to the Persian Gulf’s energy industry. Iran’s state television said Wednesday that the Islamic Republic would be attacking oil and gas infrastructure in Qatar, Saudi Arabia and the United Arab Emirates after an attack on facilities associated with its offshore South Pars natural gas field.

If the disruptions keep oil and gas prices high for long, they could send a debilitating wave of inflation crashing into the global economy.

A report released Wednesday morning showed that inflation pressures were already worsening before the war began. It said inflation at the U.S. wholesale level unexpectedly accelerated last month to 3.4 per cent, and those cost increases could hit U.S. households if producers pass them all along.