“The biggest concern wasn’t the strike action itself, but the possible duration of the strike,” says Rob Haworth, senior investment strategy director for U.S. Bank Asset Management. “Since the strike is suspended but the contract is not yet settled, it’s still an issue in the back of the market’s mind.” Haworth says labor’s demands for increased wages may contribute modestly to inflation pressures. However, he notes, “supply chain disruptions owed to striking dockworkers are off the table at least until early 2025.”
Middle East tensions rise
Fears of a widening Middle East conflict have been evident since the October 7, 2023, attack on Israel by Hamas. This led to Israel’s retaliatory attack on the Gaza Strip. At the same time, Hezbollah fighters based in neighboring Lebanon also presented a threat. In early October 2024, fighting escalated between Israel and Iran-backed Hezbollah, adding to fears of a larger regional conflict.
The Middle East’s prominent oil production role raises questions about whether oil supplies might be affected, but Haworth says to this point, it’s not clear whether significant price hikes will materialize. “Oil prices today (at the $75/barrel range) are near the low end of what we’ve seen in the last year-and-a-half.” By contrast, Haworth notes that in February 2022, the early days of the Russia-Ukraine war, oil prices reached $120/barrel.2