Bonds & Stocks
Stocks were under pressure and oil climbed as Iran intensified its rhetoric against Israel after an explosion at a Gaza hospital that complicated diplomatic efforts to rein in the Middle East conflict. The S&P 500 dropped for a second straight day. Treasury yields and the dollar edged higher, with traders also awaiting comments from some Federal Reserve speakers and the central bank’s Beige Book for clues on the outlook for monetary policy. Fed Chair Jerome Powell is set to speak at the Economic Club of New York on Thursday.
Economy
The Federal Reserve faces potential policy pitfalls ahead as it wrestles with how to respond investor angst about the US government’s $35.5 trillion mountain of dept. Concerns about American’s fiscal future have already contributed to a run-up in US bond yields that has surprised policymakers and prompted them to consider postponing for now plans for another interest-rate increase.
World
Iran called for an oil embargo against Israel over its air strikes on Gaza, causing crude futures to rise. Iranian Foreign Minister Hossein Amirabdollahain said there should be “an immediate and complete embargo on the Zionist regime by Islamic countries, an oil embargo against the regime” according to a ministry statement on Telegram. He also urged Muslim countries to expel Israeli ambassadors.