Asian Stocks Slide as Oil Prices Surge Past $111 Per Barrel

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Shares in Asia retreated on Thursday after a slump on Wall Street, as oil prices spiked to over $110 per barrel. Tokyo's Nikkei 225 index fell 2.5%, while other major benchmarks in the region also declined by more than 1%. The sell-off came after a report showed that U.S. wholesale inflation unexpectedly accelerated last month, raising concerns about the potential for further price increases due to the ongoing war's impact on energy markets.

Why it matters

The surge in oil prices is a major concern for the global economy, as it could lead to a debilitating wave of inflation if the disruptions to energy supplies persist. This comes at a time when central banks are already grappling with high inflation, and the Federal Reserve's policy decisions will be closely watched as it tries to balance price stability with supporting economic growth.

The details

The sell-off in Asian markets followed a slump on Wall Street, where the S&P 500 fell 1.4% and the Nasdaq Composite slid 1.5%. Investors were reacting to the Federal Reserve's decision to keep interest rates steady, rather than resuming cuts that could have provided a boost to the job market and economy. Additionally, a report showed that U.S. wholesale inflation unexpectedly accelerated to 3.4% last month, raising concerns about the potential for further price increases due to the ongoing war's impact on energy markets.

• On Wednesday, the S&P 500 fell 1.4% and flipped to a loss for the week so far.
• On Thursday, Tokyo's Nikkei 225 fell 2.5% and most other major benchmarks in Asia fell more than 1%.

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