US stock markets edge lower as rising oil prices fuel inflation fears

United States stock markets finished in mixed territory on Wednesday, July 22, 2026, as investors navigated a period of intense geopolitical instability and rising energy costs. The S&P 500 declined 10.24 points to 7,498.96, while the Dow Jones Industrial Average dipped 6.06 points to 52,218.58. The Nasdaq composite fell 146.30 points to 25,690.90.

Market sentiment remains heavily influenced by the escalating war with Iran. The U.S. Military confirmed it was conducting its 12th night of strikes against Iranian targets as of Wednesday. President Donald Trump has issued public threats to destroy Iranian civilian infrastructure, including bridges and power plants, in retaliation for Iranian attacks on vessels in the Strait of Hormuz. Iran’s foreign minister, Seyed Abbas Araghchi, responded to these threats on social media, stating that any aggression against Iranian infrastructure would compel a decisive response. Amidst this military activity, the U.S. Government is seeking $87.6 billion in supplemental funding for Pentagon operations, with the war’s cost to date estimated at $37.5 billion, according to testimony provided by Defense Secretary Pete Hegseth.

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The conflict has caused significant disruption to global energy markets. Brent crude oil prices rose 3.4% to $94.07 per barrel on Wednesday, reaching their highest level in nearly six weeks. Analysts have expressed concern regarding the potential for further price volatility if Houthi rebels successfully block the Bab al-Mandeb strait, a transit point for roughly 6.2 million barrels of oil per day.

"If that route becomes inoperable, then the oil supply disruption becomes more serious and we start talking again about a 'no way out' situation,"

Helima Croft, head of global strategy at RBC Capital Markets, via Yahoo Finance

Rising energy prices are intensifying concerns regarding inflation, which has prompted investors to monitor Federal Reserve policy closely. The yield on the 10-year Treasury rose to 4.65% on Wednesday, up from 4.63% the previous day. Increased energy costs are also putting upward pressure on consumer prices, with the average price for a gallon of regular gasoline in the U.S. Rising to $4.06.

Corporate earnings reports elicited mixed reactions from the market. Super Micro Computer shares surged 19.8% following positive profit margin forecasts. Conversely, GE Vernova shares fell 8.7% after the company missed profit expectations. Investors also maintained a cautious stance toward the technology sector, particularly in regard to artificial intelligence spending, as they awaited reports from major firms such as Alphabet. Micron Technology finished the day with a 1.2% drop, following earlier fluctuations.

The climate of uncertainty has prompted a shift toward defensive assets and alternative investments. Gold rebounded to $4,140, a 1.5% increase on Wednesday. Bitcoin moved above $66,000, driven by institutional inflows through spot exchange-traded funds, though analysts note that Bitcoin continues to correlate more closely with risk appetite than traditional safe-haven assets.

What to watch next

• Energy Transit: Continued stability of the Bab al-Mandeb strait and the potential for a full blockade impacting global shipping routes.
• Military Escalation: Possible U.S. Strikes against the "Pickaxe Mountain" site near Iran's Natanz nuclear complex.
• Fiscal Impact: Legislative progress on the $87.6 billion supplemental funding request to support ongoing military operations.
• Diplomatic Efforts: The status of potential mediation attempts in Pakistan aimed at salvaging an interim ceasefire, as both the U.S. And Iran remain entrenched in disputes over maritime security.