Oil prices still volatile on Iran war uncertainty

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NEW YORK — The U.S. stock market is stuck in a holding pattern on Aug. 28 in the countdown to a highly anticipated speech by the head of the Federal Reserve.

One wild card for inflation has been oil prices, which have been volatile due to uncertainty about the war in Iran. It is still not known when the Strait of Hormuz, through which a fifth of the world's crude passes on a typical day, will reopen to tanker traffic

The price for a barrel of Brent crude, the international standard, rose 0.2% on Aug. 28 to $88.68. U.S. benchmark crude oil fell 0.1% to $83.46 per barrel.

Brent’s price zigzagged between $72 and $102 last month as hopes rose and fell that the United States and Iran could reach an agreement to end hostilities and the threat to oil tankers in the strait.

The S&P 500 added 0.1% in early trading. The Dow Jones Industrial Average was up 89 points, or 0.2%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was close to unchanged.

The bond market was also holding relatively steady with less than a half hour to go before Kevin Warsh will give his first speech as chairman of the Fed at an annual economic symposium in Jackson Hole, Wyo. The mountain setting has been the backdrop for major policy announcements by the Fed in the past.

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Warsh 

Warsh has been adamant so far in his chairmanship that he wants to give financial markets fewer clues about what the Fed plans to do with interest rates to fulfill its job of keeping inflation low and the job market strong. He has said he wants markets to react to what incoming data says about the economy and inflation rather than what the Fed says.

But he’s under pressure to offer more clarity about whether his tough talk about getting high inflation back down to the Fed’s 2% goal is just that, or whether the Fed plans to back it up with action. The Fed has kept its main interest rate steady since December, even though inflation remains well above its target.

Higher rates could help improve inflation, but they would also slow the economy and hurt prices for investments. And President Donald Trump, who appointed Warsh, has been vocal about wanting interest rates to be lower rather than higher.

The U.S. Treasury Department made an unusual move last week to intervene in the bond market to get yields lower on longer-term Treasurys, though analysts said it will likely have only a limited effect.

The yield on the 10-year Treasury edged up to 4.68% from 4.67% late Aug. 27.

On Wall Street, Gap jumped nearly 20% after the retailer reported stronger profit for the latest quarter than analysts expected. It also said Michael Francis, an industry veteran who began his career on the retail sales floor, will take over as head of its Old Navy stores.

Marvell Technology weighed on the market and fell 7.9% even though the chip company reported profit and revenue for the latest quarter that edged past analysts’ expectations. CEO Matt Murphy said its business related to artificial-intelligence technology is strong, and it raised its forecasts for upcoming revenue growth.

But analysts said much of that optimism may have already been baked into Marvell’s stock price, which came into the day with a surge of 184% for the year so far.

In stock markets abroad, indexes rose across much of Europe following a mixed finish in Asia. South Korea’s Kospi fell 1.8%, and France’s CAC 40 rose 1% for two of the world’s bigger moves.

AP Business Writers Michelle Chapman and Elaine Kurtenbach contributed to this report.