Gas topped $4 daily in August for the first time. New U.S. strikes on Iran are sending oil prices even higher again

Oil prices surged to above $4 per gallon in August for the first time ever, according to the AAA. This marks the most expensive August at the pump on record, surpassing even the high prices during the supply chain crunch during the COVID-19 pandemic in August 2022. The increase in energy costs has contributed to stubbornly high inflation, which has been impacting household spending and consumer confidence.

The Federal Reserve now faces a more complex path for its interest rate policy. Inflation remains far above the Fed's 2% target, and Wall Street anticipates at least one interest rate hike before the end of the year to curb inflation. The yields on the two-year and 10-year Treasuries have risen accordingly, indicating expectations of increased Fed intervention.

The job market, while still resilient, is showing signs of weakening, with employers cutting jobs in July. The latest job market data is expected later in the week, with July's employment figures showing a surprising drop in job creation.