Oil prices climb as Iran war drags past 60-day deadline

Oil prices ticked higher on August 17, 2026, as the conflict with Iran entered its second month, with Brent crude rising 0.7% to $89.15 per barrel. The modest gain came despite recent volatility that saw Brent swing between $72 and $102 in July as hopes for a U.S.-Iran deal to reopen Persian Gulf shipping lanes ebbed and flowed. The 60-day deadline for a ceasefire and nuclear accord, set under a June agreement signed by President Donald Trump at Versailles, expired on August 17 with no resolution in sight. The war’s persistence has kept oil markets on edge, though the latest move was relatively subdued compared to prior swings. Wall Street remained near record highs, with the S&P 500 slipping 0.1% but still close to its August 13 peak, while the Dow Jones Industrial Average fell 0.3% and the Nasdaq was flat. Corporate earnings have been a major driver of the market’s rally, with S&P 500 companies on track for a 50% year-over-year surge in spring earnings per share—the strongest growth since 2021, when the economy was rebounding from the COVID-19 pandemic. Nearly all S&P 500 firms have already reported, but this week’s focus shifts to retail giants Home Depot, Target, and Walmart, which are under pressure as consumers face tighter budgets. Last month’s retail sales report showed a surprise decline, and retailers’ CEOs are expected to shed light on spending trends amid persistent inflation and a cooling job market. The 10-year U.S. Treasury yield edged up to 4.70% from 4.68% on June 14, reflecting stronger-than-expected manufacturing growth in New York state. The yield has surged from 3.97% before the Iran war, driven by oil-driven inflation concerns and rising expectations that the Federal Reserve may need to hike interest rates. Higher rates could curb inflation but risk slowing economic activity and increasing borrowing costs. Mortgage rates have already climbed near one-year highs in response. Recent inflation data, however, suggested a slower pace of price increases than earlier in the summer, fueling speculation that the Fed might delay further rate hikes until later in the year. Trading on Wall Street was subdued, with L3Harris Technologies dropping 2.6% after CEO Christopher Kubasik resigned following conduct deemed inconsistent with company values, though unrelated to financial performance or operations. Alphabet slipped 0.1% despite Berkshire Hathaway’s increased stake in Google’s parent company. Overseas, European indexes slipped while Asian markets finished stronger, with Hong Kong up 1.3% and Shanghai up 1.4%.