Oil Climbs, Major U.S. Stock Indexes Fall on Mideast Escalation Ahead of Fed Decision -- WSJ

Oil prices are surging and stocks are skidding as the Mideast war once again raises the risk of hotter-for-longer inflation, just as Fed governors are meeting to decide on interest rates.

Global and U.S. oil prices jumped more than 7% after Iran launched a surprise attack on U.S. forces in Jordan, prompting President Trump to vow to hit back hard. The fresh escalation threw cold water on the latest effort to de-escalate the conflict, raising the prospect of prolonged disruptions to energy markets and higher prices.

Treasury yields rose and stocks swooned; the Dow industrials slid over 900 points, and chip stocks sold off again.

The Federal Reserve is expected to hold rates steady this afternoon, but a hike isn't out of the question--traders put that probability at about one-in-three, according to CME Group. Chairman Kevin Warsh's tight-lipped posture has made the meeting harder to read.

In South Korea, memory-chip maker SK Hynix reported a jump in earnings, but came up short of high expectations, sending the stock tumbling nearly 10%.

Recent anxieties around the AI trade and so-called hyperscalers' spending will face another test this afternoon, when Meta and Microsoft report earnings.

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July 29, 2026 12:51 ET (16:51 GMT)