Stocks drop, oil rises as Iran and rate worries dog traders

HONG KONG – Fresh worries about the Middle East ceasefire and the prospect of a US interest rate hike hit most stocks and lifted oil prices yesterday, following a rollercoaster week for markets that has sent shivers through trading floors. Investors took a little heart from closely watched data Wednesday that showed May US inflation had come in around expectations, but still hit a more than three-year high as fuel costs surge owing to the Iran war.

The reading came days after figures showing a forecast-busting jump in jobs creation last month ramped up bets on the Federal Reserve hiking interest rates for the first time since 2023. Attention will now turn to the Fed’s next policy meeting in a week’s time, and while new chief Kevin Warsh is unlikely to make a hike his first act, observers said futures markets suggest a move up could come before the end of the year.