Oil jumps as markets watch inflation and yen intervention risk

Wall Street slipped Monday while oil prices rose 5% as hopes faded for a U.S.-Iran peace deal and reopening of the Strait of Hormuz. Investors also looked ahead to U.S. inflation data later in the week and watched for possible further intervention in the yen.

The Nasdaq fell 0.3% and the Russell 2000 lost 0.6%, while energy stocks rose 4.6% and technology shares fell 1%. Gold climbed 1% to a nine-week high of $4,395 an ounce, and U.S. yields rose 4 to 5 basis points across the curve.

The yen was the weakest major currency, down 1% through 159 per dollar, after a late-July U.S.-Japan currency intervention triggered a record liquidation of net short yen positions in CFTC futures contracts.

China’s inflation data also pointed to weak demand, with factory-gate and consumer price inflation slowing more than expected and annual core CPI easing to 0.9%.

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