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KARAJ, IRAN - OCTOBER 2: Zolfaghar ballistic missile and military equipment used by Iranian forces are showcased Anadolu | Anadolu | Getty Images Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC's Daily Open. Tensions in the Strait of Hormuz have risen after a Singapore registered ship was sunk in the critical waterway, and Iran said it was "counting the moments" until it can strike U.S. warships.
Oil markets responded to mounting worries, with prices of the critical commodity extending gains, while U.S. President Donald Trump's deal with Russia for supplying diesel is unlikely to materially impact prices. What you need to know today A major escalation in the Strait of Hormuz has seen a container ship sunk in the waterway, as Iran escalated its attacks on commercial vessels.
The GFS Pride, registered in Singapore, sank after it was struck by an unidentified projectile and caught fire. The ship's 21 crew members were safely evacuated and no injuries were reported, according to the Maritime and Port Authority of Singapore . "Such attacks are unprovoked, unjustifiable and a breach of international law," the Singapore maritime authority said in a statement Wednesday.
A second vessel, the GFS Giselle, was also hit and sustained damage to its hull, but managed to arrive at safe anchorage and none of its crew were hurt, the authority added. Tehran has also ratcheted up its rhetoric, saying it was ‘counting the moments’ until it can strike U.S. warships in the Strait. Islamic Revolutionary Guard chief Ali Ozmaei reportedly said Wednesday, "If the Americans think the Strait of Hormuz is open, let them come closer.
We are impatient to sink American warships." Washington's forces, however, disputed the claims of Iranian control, with U.S. Central Command saying "American forces and regional partners clearly control the Strait of Hormuz." The recent development, along with additional attacks by Tehran-backed Houthi rebels on oil giant Saudi Aramco's facilities in Saudi Arabia, have pushed oil prices higher , with international benchmark Brent up at $106.06 a barrel, while U.S. West Texas Intermediate advanced to $95.09 a barrel.
Inflation jumps High energy prices have also contributed to a hot inflation report in the U.S., with the consumer inflation rate for September up 3.7% year on year, higher than expectations of 3.6%. The energy index jumped 5.2% as tensions continued between the U.S. and Iran in a war launched in late February that shows no signs of ending anytime soon. Core CPI — which strips out prices of food and energy — was up 2.6% on an annual basis, compared with estimates of 2.5%.
Markets slipped on the news , with the S&P 500 pulling back 1.11% and the Nasdaq Composite shed 1.88%. Tracking Wall Street declines overnight, Asia markets tumbled Thursday. The CPI report comes as oil prices remain elevated and consumers pay more for gasoline, which is averaging at $4.33 a gallon, compared to about $3.08 per gallon a year earlier, according to AAA .
Last week, Trump announced he would temporarily ease restrictions on Russian diesel fuel exports, but analysts don't believe the deal will do much to lower fuel prices for truckers and farmers. Tech woes Over in the tech world, trouble is also brewing as Netflix said on Wednesday it will lay off roughly 6% of its employees, or about 1,000 workers , according to a memo obtained by CNBC. The job cuts will largely impact the product, tech, legal and HR teams.
The layoffs come just a few weeks after Sarandos told attendees at the Bloomberg Screentime conference that the company was "not growing as fast as I want." AI giant OpenAI is also facing a legal quagmire of its own, with eight U.S. states filing lawsuits against the company on Wednesday. The suit alleges that the artificial intelligence company's ChatGPT chatbot is an unsafe product that's harmed children and deceived parents. Iowa Attorney General Brenna Bird said in a release that "OpenAI claims ChatGPT is safe while it's giving dangerous medical advice, encouraging people to hurt others, and coaching people to commit suicide — all while pretending to be their fake friend," she added.
G20 heavyweights meet G20 finance ministers and central bank governors are meeting on the sidelines of the IMF-World Bank Annual Meetings in Bangkok on Thursday, although U.S. Treasury Secretary Scott Bessent will be skipping the event. The U.S. holds this year's G20 presidency, and the question would be how much gets done before leaders convene again in Miami in December. — Lim Hui Jie, Anniek Bao And finally...
Scott Bessent’s growth plans aren’t enough to tame surging deficit and debt pile, IMF chief says The head of the International Monetary Fund has urged Treasury Secretary Scott Bessent to trim the deficit, warning that his plan to lean on growth to tame U.S. Government debt isn't sufficient. "Growth of course helps, but it cannot deliver fast enough the necessary adjustments," Managing Director Kristalina Georgieva said at a panel Wednesday at the IMF-World Bank annual meetings in Bangkok.
"Some [fiscal] measures would be necessary." Georgieva said Bessent recognizes that federal deficits and overall debt have grown "too high," and that measures to improve the budget balance and reduce the debt are necessary. But "the authorities very much rely on strong growth in the United States" to bring them down, she said. — Anniek Bao
Source: CNBC
