Oil prices up sharply this week

Oil prices have surged this week, with U.S. crude and Brent crude up 8-9%. The six-month war with Iran has disrupted the world’s fuel flow, causing U.S. gasoline prices to be higher this Labor Day weekend than ever before. Diesel hit an all-time high of $5.85 a gallon on September 4, as the Strait of Hormuz remains effectively closed. The price shock is expected to impact prices for consumers, as higher diesel prices mean higher transportation costs for many everyday goods. The surprise increase in hiring could give the Federal Reserve leeway to raise its benchmark short-term interest rate to fight inflation when central bank policymakers meet later this month. The S&P 500 slipped 0.1% in morning trading, while the Dow Jones Industrial Average was down 211 points, or 0.4%, as of 10:05 a.m. Eastern time. The Nasdaq composite edged up 0.1%. U.S. government bond yields, which had eased the last couple of days, mostly rose. The yield on the 10-year Treasury, which influences mortgage rates, held steady at 4.77%. The Labor Department reported that hiring in August far exceeded the 65,000 forecasters had expected, according to a poll by FactSet. A stronger jobs market could make matters more complicated for the Fed, which has to balance supporting job growth with fighting inflation. Raising interest rates can help tame inflation by slowing economic growth. Expectations for a rate hike in September increased to 60.2% on September 4 following the release of the jobs report, up from 49.4% on September 3 and from 57% a week ago, according to CME FedWatch.