Weekly Analysis: Wall Street Drops as Brent Crude Breaks Above $100, Reviving Inflation Worries

Key Takeaways

• Oil surged above $100, as escalating US-Iran tensions raised concerns over supply disruptions and reignited global inflation fears.
• US inflation pressures increased, with PPI coming in above expectations and pushing markets to price a higher probability of a September Fed rate hike.
• The ECB raised rates by 25 bps, highlighting how persistent energy-driven inflation is forcing central banks to maintain a hawkish stance.
• US stocks came under pressure, as higher oil prices, Treasury yields and Fed-hike expectations weighed particularly on growth and technology shares.
• Next week’s FOMC meeting is the key market event, with the rate decision, dot plot and Fed guidance likely to drive the dollar, yields, stocks and gold.
• Geopolitics remains the biggest wildcard, with further escalation potentially pushing oil higher, while any de-escalation could trigger a relief rally across global markets.

Global markets faced another volatile week as escalating Middle East tensions pushed crude oil above $100 per barrel, reigniting inflation concerns and putting pressure on equities and bonds. At the same time, stronger US inflation signals and a hawkish shift in central-bank expectations increased uncertainty ahead of next week’s major Fed decision.

Oil Gains 13% during the week as Tensions Rise Again

The escalation in the US-Iran conflict remained the dominant market risk, with attacks on oil tankers and disruptions around key shipping routes raising fears of a prolonged energy-supply shock. Brent crude climbed above $100 per barrel, reaching around $110 by Friday and gaining nearly 13% on the week. Further escalations could push prices toward $120. Higher energy costs are particularly concerning because they can feed directly into inflation and force central banks to maintain or raise interest rates.

US Wholesale Inflation Shows Prices Remain Elevated

The inflation story became increasingly hawkish. US August PPI rose 0.4% month-on-month and 5.4% year-on-year, with some underlying components showing renewed price pressures, while markets increased the probability of a September Fed hike to around 70%.

The ECB also raised rates by 25 basis points to 2.50%, its second hike this year, as energy-driven inflation moved above 3%. The ECB raised its 2026 inflation forecast to 3.0%, highlighting how the Middle East energy shock is forcing central banks to reassess the inflation outlook.

US Stock Indices Fall Sharply as Investors Grow Concerned About Rising Yields

US equities came under pressure as higher oil prices, Treasury yields and Fed-hike expectations increased the discount rate applied to stocks. The S&P 500 and Nasdaq both declined during the week, while the 10-year Treasury yield approached 5%, making the combination of higher yields and higher energy costs particularly challenging for growth and technology stocks.

Apple was a notable exception after unveiling its iPhone 18 Pro, iPhone 18 Pro Max and first foldable iPhone, the $1,999 iPhone Duo. The company also raised prices by $100 on its new Pro models, but Apple shares gained around 3.6% the following day, as investors viewed the launch positively despite concerns over pricing and consumer demand.

Outlook for Next Week

The Federal Reserve’s September 15–16 meeting will be the main event. The decision will be accompanied by a new Summary of Economic Projections and dot plot, while retail sales, jobless claims, housing data and industrial production will provide additional clues about the strength of the US economy.

The Bank of Japan will also meet on September 17–18, with markets expecting a 25-basis-point hike to 1.25%. A BOJ hike alongside a potentially hawkish Fed could create significant volatility in USDJPY, particularly given the yen’s recent strengthening and ongoing intervention concerns.

The market enters next week with a hawkish rates backdrop and elevated geopolitical risk. Oil prices and the Fed decision will likely determine whether the recent risk-off move extends or reverse.

Major Economic Calendar Events for the Upcoming Week

Technical Analysis and Forecast:

Gold Technical Analysis

Gold remains in a long-term bullish structure, although the daily chart shows a significant correction from the recent $4,646 high. The precious metal is currently around $4,350. Price action shows that short-term momentum remains bearish despite the broader uptrend.

The recent low around $4,300 is the key immediate support, followed by $4,129–$4,130. On the upside, $4,390–$4,465 represents the main resistance zone, with $4,646 being the major resistance. Holding above $4,300 could allow the recovery to continue, while a break below it would expose the $4,130 area. The overall bias is neutral to bearish short term, but bullish over the medium to long term.

Gold Daily Chart

Source: STARTRADER app | Gold faces selling pressure from rising yields and rate hike expectations

Brent Technical Analysis

Brent crude remains in a strong bullish trend, with price reaching $110.00 before pulling back to around $106.85. Despite the latest decline, the broader structure continues to show higher highs and higher lows. Price remains well above the moving averages MA10 and MA20, although it has fallen below the MA5 at $103.57 following the sharp rally.

The immediate resistance is $110.03, followed by the psychological $115 level. On the downside, $103.50 is the first support, followed by $100 and the MA20 around $95.40. A break above $110 would reinforce the bullish momentum, while a sustained move below $100 would suggest a deeper correction. Overall, the technical bias remains bullish, although the sharp rally leaves the market vulnerable to further short-term profit-taking.

Brent Daily Chart

Source: STARTRADER app | Brent tops $110 as rising tensions in the Middl driving energy supply fears

EURUSD Technical Analysis

EURUSD remains in a medium-term recovery trend, but the pair is currently consolidating after reaching around 1.1700 in August. Price is now near 1.1609. Price action suggests that short-term momentum has weakened.

Immediate resistance is around 1.1625–1.1650, followed by 1.1700–1.1726. On the downside, 1.1580 is the first important support, followed by 1.1500 and the stronger 1.1420 area. A break above 1.1650 would strengthen the bullish recovery, while a move below 1.1580 would increase the risk of a deeper correction. Overall, the outlook is neutral to slightly bearish in the short term.

EURUSD Daily Chart

Source: STARTRADER app | EURUSD remains range-bound awaiting Fed policy decision next week

S&P 500 Technical Analysis

The S&P 500 remains in a broader bullish trend, but the daily chart shows a short-term correction from the 7,825 high. The index is currently around 7,635. Price action indicates that short-term momentum remains under pressure.

The key support is around 7,600, followed by the recent low near 7,589 and stronger support around 7,500. On the upside, 7,675–7,690 is the first resistance zone, while 7,825 remains the major resistance. A break back above 7,690 would improve the short-term outlook, while a break below 7,589 could signal further downside. Overall, the bias is neutral to slightly bearish in the short term, within a still-bullish broader structure.

S&P 500 Daily Chart

Source: STARTRADER app | S&P 500 declines for the week on rate hike expectations

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