Middle East Violence Drives Oil Prices Higher Amid Global Market Uncertainty

Oil prices surged by 2% on Tuesday as violence escalated in the Middle East, adding to uncertainty over the future of the conflict. The recent uptick in tensions has curtailed traffic in the Strait of Hormuz, which accounts for about 20% of global oil shipments.

The Brent crude price rose to $92.35 per barrel, while U.S. benchmark crude climbed 2.5% to $87.84 per barrel. This increase in energy prices has fueled already stubbornly high inflation, well above the Federal Reserve's 2% target.

Stocks also wavered as a result of the escalating violence, with shares in online fast-fashion retailer Shein falling by 10% after their Hong Kong listing on Tuesday. The Dow Jones Industrial Average and S&P 500 index both declined last week, finishing August on a downbeat note.