--- title: "U.S. economy had begun to speed up - until Iran peace talks failed and oil prices surged again" type: "News" locale: "en" url: "https://longbridge.com/en/news/293771740.md" description: "S&P Global surveys indicate U.S. economic growth in July, driven by services and temporary boosts from the World Cup and national celebrations. However, this momentum faces risks due to resumed Iran conflict, surging oil prices, and rising inflation. Business confidence has been clouded by supply disruptions and higher energy costs, potentially prompting Federal Reserve interest rate hikes." datetime: "2026-07-24T14:43:34.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293771740.md) - [en](https://longbridge.com/en/news/293771740.md) - [zh-HK](https://longbridge.com/zh-HK/news/293771740.md) --- # U.S. economy had begun to speed up - until Iran peace talks failed and oil prices surged again By Jeffry Bartash S&P Global surveys find rising inflation and supply woes The U.S. economy has grown throughout the course of the Iran war, but not without the cost of higher inflation. The numbers: The U.S. economy improved in July and businesses ramped up hiring, but the gains could prove short-lived if the conflict with Iran intensifies, oil prices climb even higher and inflation worsens. A pair of S&P Global surveys that track the growth of U.S. businesses both showed positive momentum this month. The big question is whether the momentum can last. "July's upturn may not be the start of an improving trend," said Chris Williamson, chief business economist at S&P Global. The S&P Global services index rose to an eight-month high of 53.6, up from 51.2 in the prior month. The services side of the economy - restaurants, retailers, hospitals and so forth - employs most Americans. A similar S&P survey of manufacturers inched down to 53.8, a four-month low. The S&P surveys are among the first indicators each month to assess the health of the economy. Any number above 50 signals growth. Key details: The U.S. got a temporary boost in July from the World Cup and celebrations tied to America's 250th birthday. The CEO of Bank of America estimated the soccer event added $20 billion in extra spending to the economy. The now-ended pause in Mideast fighting briefly raised business confidence. Companies even added to employment for the first time in three months, S&P found. Yet the resumption of fighting has clouded the outlook, especially among manufacturers coping with tariffs, higher energy prices and supply disruptions. The disputed Strait of Hormuz is a key waterway for transporting fertilizer and other key commodities, in addition to oil. The cost of materials rose to a one-year high and companies raised prices on customers to offset their own higher expenses, leading to the steepest rise in business-related inflation since 2022. Big picture: The economy was primed to benefit from the apparent end of the U.S. conflict with Iran, but peace talks failed, hostilities resumed and the price of oil has surged again. Oil prices haven't returned to April's high of $113 a barrel. They have risen to around $90 from less than $70 a few weeks ago, however. Whatever the case, the increase in energy costs is bound to add upward pressure to inflation and possibly push the Federal Reserve to raise interest rates either in July or, more likely, September. Higher rates would add to the stress on the economy. Market reaction: The Dow Jones Industrial Average and S&P 500 rose in Friday trading. \-Jeffry Bartash This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. 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