Updated
Updated · The Motley Fool · Jul 19
WTI, Brent Crude Jump 13% as Higher Oil Threatens Fed Rate Hikes
Updated
Updated · The Motley Fool · Jul 19

WTI, Brent Crude Jump 13% as Higher Oil Threatens Fed Rate Hikes

1 articles · Updated · The Motley Fool · Jul 19

Summary

  • WTI and Brent crude futures climbed about 13% in the seven days through July 17, marking their biggest weekly gain in several months.
  • That oil surge could lift inflation enough to push the Federal Reserve toward rate hikes this year, a shift that has historically pressured equities.
  • Across the last nine Fed tightening cycles, the S&P 500 and Nasdaq Composite fell an average 10% and 12% within three months of the first hike.
  • Midterm years have also brought deeper drawdowns over the past 40 years, with average peak-to-trough declines of 17% for the S&P 500 and 24% for the Nasdaq.
  • History still favors staying invested: after first closing in correction territory, the S&P 500 returned 18% over the next year on average and the Nasdaq 21%.

Insights

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