Markets Slip as Oil Surges and AI Caution Grows

The S&P 500 shed 0.48% to reach 7619.98, while the tech-heavy Nasdaq Composite retreated 0.56% to 26186.41. Behind the decline, energy markets signaled fresh volatility: oil futures jumped 1.3% to $101.39 a barrel. The supply squeeze intensified as Saudi Arabia halted an East-West pipeline and Houthi militants tightened their control over the Bab al-Mandeb strait, threatening global shipping lanes.

Rising fuel costs have recalibrated expectations for Federal Reserve policy. With central bank head Kevin Warsh expected to hike rates to a 3.75%–4% range this Wednesday, the 10-year Treasury yield briefly pierced the 5% threshold—a level unseen since 2007. J.D. Joyce, president of Joyce Wealth Management, noted that the spike in diesel prices poses a persistent threat to logistics and broader inflation control, leaving investors wary of how quickly energy costs might stabilize.