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NEW YORK (AP) -- Oil prices keep climbing as the war with Iran keeps clogging the global flow of crude, and they leaped Thursday to their highest levels since before the summer. That worsened worries about inflation and cranked up pressure within the bond market, helping to send stocks lower again on Wall Street.
The S&P 500 fell 0.6% for a fourth straight loss, its longest such streak since June, though it's not far from its all-time high set last month. The Dow Jones Industrial Average dropped 316 points, or 0.6%, and the Nasdaq composite sank 0.7%.
Stocks sank under the weight of rising oil prices. Brent crude, the international standard, climbed another 6.3% and briefly topped $108 per barrel for the first time since May before settling at $107.63.
It's jumped from less than $72 in early July as hopes fade that the war with Iran will allow oil to flow freely again from the Middle East anytime soon. President Donald Trump said on Wednesday that oil prices likely won't come down until after the U.S. midterm elections in November.
The jump has vaulted the price for a gallon of regular gasoline to an average of nearly $4.28 across the United States, according to AAA. That's up nearly 34% from a year earlier and is not only costing people more at the pump but also through higher prices for all kinds of products that move by truck to store shelves.
A report on Thursday said inflation at the U.S. wholesale level accelerated to 5.4% last month from 4.8% in July, and retailers could eventually pass such increases in prices onto shoppers. A report is coming on Friday that will show how much inflation U.S. consumers are feeling.
The typical move to rein in high inflation is for the Federal Reserve to raise its main interest rate, the federal funds rate. Such a move then filters out through the rest of the bond market, makes it more expensive for U.S. households and businesses to borrow money, slows the overall economy and undercuts prices for investments. That hopefully would remove some of inflation's fuel.
A report on Thursday suggested the U.S. job market may remain solid, with fewer workers applying for unemployment benefits last week. That could give the Fed more confidence that the economy could withstand higher interest rates.
Following Thursday's reports, traders see a roughly 73% chance the Fed will raise the federal funds rate at its meeting next week. That's up from the 61% probability seen the day before, according to data from CME Group. That's also despite Trump's consistent lobbying for interest rates to go lower rather than higher.