S&P 500 Edges Lower, Oil Surges on Iran Hormuz Threat Ahead of US CPI

The S&P 500 slipped slightly on Tuesday, with traders exercising caution ahead of Wednesday’s US July consumer price index (CPI) report. The move came amid a mixed session where concerns over a potentially hotter inflation print were weighed against renewed geopolitical jitters.

Oil prices surged above $83 a barrel following reports that Iran intends to keep the strategic Strait of Hormuz closed until its demands are met. The strait is a critical chokepoint for global crude shipments, and any prolonged disruption could add upward pressure on energy costs and broader inflation.

Treasury yields edged lower as the market balanced expectations of cooling inflation against the risk of further Federal Reserve tightening. The upcoming CPI data is seen as pivotal for whether the central bank opts to hold rates steady or considers additional hikes.

Market participants are now laser-focused on the inflation release for clues on the Fed’s next move, with the S&P 500 moving cautiously in a narrow range ahead of the data.