Crude oil surged nearly 4% Thursday after a report that the White House had asked the Pentagon to prepare strike options against Iran that could be executed before next month's midterm elections — a combination of supply risk and renewed inflation anxiety that pulled U.S. equities back from record highs for a second straight session.
Brent crude futures gained 3.9% to $104.07 a barrel, touching gains of as much as 4.2% intraday, while West Texas Intermediate for November delivery climbed roughly 4% to about $92. The move ran counter to a widespread market assumption that President Trump would avoid escalating the conflict before voters go to the polls.
Hormuz Traffic Thins as Tanker Attacks Mount
The geopolitical premium is being rebuilt on more than headlines. Iran has stepped up attacks on oil and gas tankers as it braces for a renewed U.S. military campaign, with at least nine vessels struck in and around the Strait of Hormuz over the past week — the highest weekly rate since the conflict began on February 28.
Shippers are responding by staying away. Vessel traffic through the strait fell to its lowest level in more than two months, with only seven commodity ships transiting on Tuesday, the fewest since July 23. Before the conflict, roughly one-fifth of the world's oil and gas moved through the waterway.
"Renewed tensions — or, rather, the increasingly crowded headlines surrounding existing and persistent Middle East tensions — weighed on market sentiment," said Ipek Ozkardeskaya, senior analyst at Swissquote.
Waller: Hikes Needed, But Not Necessarily Consecutive
The oil move landed the same morning Federal Reserve Governor Christopher Waller told the Central Bank of the Republic of Türkiye's Istanbul Economic Forum that the tightening cycle is not finished. With the federal funds target at 3.75%–4% following September's quarter-point increase and annual inflation running at 3.4% as of August, Waller said that "if the economic data continue to come in as expected, I anticipate additional hikes to support a timelier return of inflation to our 2% goal."
He left room on timing: "There is some flexibility about when those hikes will occur. The hikes do not need to come at consecutive meetings, but they should be in place in an acceptable period of time." Waller added that he is "not greatly concerned that tighter monetary policy threatens a damaging slowdown," but is worried the recent acceleration in inflation "will lead consumers, investors, and price-setting businesses to revise up their expectations for future inflation."
Claims Hold Below 200,000 for a Fourth Week
Labor data gave the hawks little to argue with. Initial jobless claims fell to 197,000 for the week ended October 3, below the 200,000 consensus and down from a revised 199,000. The four-week average dropped 2,500 to 198,000, keeping claims under 200,000 for four consecutive weeks. Continuing claims rose to 1.716 million from a revised 1.699 million.
"An incredibly low level of layoffs for a sustained period of time that hasn't been seen since the 1960s," said Heather Long, chief economist at Navy Federal Credit Union — though hiring remains weak, with September payrolls up just 29,000 after 133,000 in August, unemployment at 4.2%, and long-term joblessness at a five-year high.
Market Scorecard
By midmorning in New York, the S&P 500 was off 0.24% at 7,783, the Dow slipped 0.02% to 51,172, and the Nasdaq Composite fell 0.55% to 27,388. The Russell 2000 lost 0.53% and the VIX rose 2.7% to 15.49. Treasury yields stayed near multidecade highs, with the 10-year at 5.28% and the 30-year at 5.67%. Gold added 0.34% to $4,154.90, while bitcoin eased 0.93% to about $82,200.
Earnings offered a counterweight: FactSet estimates third-quarter S&P 500 earnings grew 29.5%, which would mark a third consecutive quarter above 25%. PepsiCo rose 1.88% after revenue climbed 5.6% to $25.27 billion and adjusted earnings came in at $2.34 a share, even as the company cut full-year core EPS growth guidance to 2.5%–3% from 5%–7%. Amazon said it eliminated fewer than 1,000 roles in its retail business.
Sources: Yahoo Finance (market live blog, October 8, 2026); Bloomberg; The National; Daily Sabah (Waller remarks, Istanbul Economic Forum); U.S. News & World Report/Reuters and the Associated Press (jobless claims); FactSet (Q3 earnings estimates).