Iran Strike Sparks Global Market Turbulence as Oil Prices Surge
The US launched military action against Iran on Sunday in the Strait of Hormuz, its first such move in over a month. The strikes sent shockwaves through global markets, causing oil prices to surge and stocks to plummet.
Oil prices rose by 2.8% to $90.58 per barrel for Brent crude, while the S&P 500 index fell 0.4%. The Dow Jones Industrial Average dropped 305 points, or 0.6%, and the Nasdaq fell 0.3%.
Energy stocks, however, bucked the trend, with Exxon Mobil rising 1.5% and Chevron increasing by 1.4%. On the other hand, Edison International slumped 22.8% and PG&E fell 19.9%, following reports of potential California wildfire legislation that would allow insurers to sue utilities.
The Strait of Hormuz is a crucial waterway, accounting for about 20% of global oil shipments. The recent tensions have already led to increased costs for gasoline and shipped goods, exacerbating the effects of high inflation.