Wall Street futures fall on rising oil prices before Fed meeting

Financial market commentary links the oil surge and Fed’s steady rates to renewed inflation worries and choppy trading in stocks, currencies, and crypto. Many in this group argue that while higher energy costs will push up prices in the short term, the US is not yet facing 1970s-style stagflation and the Fed can still cut rates later in the year. They expect continued volatility as traders test how far central banks will tolerate higher inflation before changing course.

• •UBS Global Wealth Management’s Paul Donovan argues that the current oil-driven price spike does not amount to stagflation because growth remains positive and wage pressures are contained.
• •Market strategists say the Fed’s decision to hold rates steady while acknowledging higher inflation risks keeps alive the possibility of rate cuts later in 2026.
• •Currency traders link the yen’s slide toward 160 per dollar to Japan’s heavy energy import bill and the widening gap between US and Japanese interest rates.
• •Crypto analysts note that Bitcoin has recently outperformed gold as some investors treat it as an alternative store of value during the oil shock and hawkish Fed signals.
• •Equity strategists warn that sustained oil prices above $100 per barrel could squeeze corporate profit margins and weigh on global stock indexes if companies struggle to pass on higher costs.