Today Fundamental Analysis: Oil jumps nearly 5% as US strategic reserves fall to lowest level since 1983

US stock futures are edging up Tuesday with the S&P 500 futures up 0.15%, Nasdaq-100 futures up 0.4%, and Dow futures roughly flat. This follows a Monday session where the S&P 500 finished nearly flat as Middle East uncertainty continued to weigh on sentiment.

Oil price rose on growing uncertainty around the US-Iran conflict. WTI settled up 5% at $82.23 and Brent up 5% as well reaching $87.80. Adding to the rise in prices, the US Strategic Petroleum Reserve has dropped below 300 million barrels for the first time in over four decades according to data from the Department of Energy. That's the lowest level since January 1983.

Gold pulled back below $4,400 a few hours ago after touching its highest level since June 5 earlier in the session. Despite Friday's weak NFP report, traders are still pricing in some chance of a Fed rate hike by year-end on inflation risk from volatile oil, and that's what's driving flows out of gold.

On the AI front, TSMC posted a strong July, with revenue of $14.5 billion, up 44.7% year-on-year, a sign that AI chip demand keeps running hot. As the world's largest chipmaker and a key manufacturer for Nvidia and Google's custom silicon, TSMC's monthly numbers serve as a bellwether for broader tech-sector AI spending.

The bigger focus now shifts to inflation data. July consumer price index lands Wednesday and the producer price index Thursday. These matter more given the weak July jobs report already muddied the Fed's picture, rising oil prices threaten to reignite inflation just as slowing hiring raises growth concerns. Fed funds futures now price roughly a 49% chance of a September hike, down from 67% a week earlier according to the CME FedWatch.

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