Oil rises and stocks fall – the economy returns to 2022

The Brent Delta Topside oil rig at the Port of Seaton in the UK on May 5, 2017.

Jan Forsyth | News Getty Images | Getty Images

This report is taken from today’s CNBC Daily Open Newsletter, our new International Markets Newsletter. The CNBC Daily Open brings investors everything they need to know, wherever they are. Like what you see? You can subscribe Here.

The US economy is back in familiar territory. But investors want to start a new life.

What do you need to know today

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Selling off in US markets, rising oil prices and escalating US-China tensions make it feel like we’re back at the worst part of 2022.

US stocks have had a terrible week. The Nasdaq fell 0.61% on Friday, down 2.41% for the week. The Dow added 0.5% and the S&P gained 0.2%, but they still ended the week lower, with the S&P posting its worst weekly performance in almost two months.

Higher energy prices have also returned. Brent contracts for April, covering oil from the North Sea in Europe, hit $86.39 a barrel, up more than 8% in a week. U.S. West Texas Intermediate crude futures rose to $79.72 a barrel, up 8.63% on the week, the best since October. Those prices jumped about 2% each on Friday after Russia said it would cut oil production next month in response to Western sanctions.

Relations between the US and China are deteriorating. After the US shot down a suspected spy balloon last week, the Commerce Department has slapped sanctions on six Chinese aerospace companies it says support China’s spyware. On Sunday, the US military shot down a fourth unidentified object, following a second on Friday and a third over the Yukon on Saturday. Although the origin of the objects is still unclear, it is increasingly likely that new sanctions will be introduced.

Against the backdrop of all this, investors are focusing with renewed vigor on the upcoming US CPI data for January. The numbers will show whether we will be forced to endure the dark days of 2022, or whether there is hope in at least one part of the economy – American consumers.

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