Oil Prices Surge, U.S. Stocks Weaken amid Iran Uncertainty

JAKARTA - The United States stock market closed mostly weaker on Monday as oil prices jumped due to uncertainty over the conflict with Iran. Chip company shares were also pressured.

Anadolu Agency quoted Tuesday, August 11, saying the Dow Jones Industrial Average fell 0.11 percent or 60.95 points to 53,975.98.

The S&P 500 was down 0.06 percent or 4.53 points to 7,753.11, while the Nasdaq Composite was down 0.32 percent or 85.26 points to 26,605.36.

Pressure is also coming from chip companies. Intel fell more than 4 percent after announcing a plan to issue $15 billion in common stock. Nvidia fell 2.8 percent. Apple shares also weakened 1.5 percent.

Oil prices also jumped. US benchmark crude West Texas Intermediate or WTI rose 5.1 percent to 82.2 dollars per barrel. Brent, the international benchmark, strengthened 5 percent to 87.7 dollars per barrel.

The rise comes as markets are skeptical a deal can be reached in the near future to reopen the Strait of Hormuz.

Iran says it is closer to an agreement with Oman on reopening the strategic route. However, Tehran still refuses direct negotiations with Washington until a number of conditions are met.

US President Donald Trump said on Sunday that Washington was "only negotiating in a limited way" with Tehran and wanted Iran to remain under economic pressure.

Anadolu Agency also noted that US crude oil supplies in the Strategic Petroleum Reserve fell by about 6.1 million barrels last week to 298.7 million barrels. This figure is the lowest level since January 1983.

Prior to Monday's weakness, the three major US indexes had just posted their strongest weekly gains since April. The S&P 500 even closed last week at a record high.

Data on Friday showed the number of workers outside the US agricultural sector in July unexpectedly contracted. The data reduced market expectations that the Federal Reserve would raise interest rates in September.

In Europe, markets were mixed as investors eyed uncertainty over diplomatic efforts between the US and Iran.

The STOXX Europe 600 was up 0.03 percent at 660.45 points. France's CAC 40 was up 0.13 percent at 8,726.03, while Germany's DAX 40 added 0.02 percent to 26,323.88.

By contrast, Britain's FTSE 100 was down 0.35 percent at 10,862.5. Italy's FTSE MIB eased 0.1 percent to 53,663.88, while Spain's IBEX was down 0.1 percent at 20,173.