Oil Price Surge Sparks Global Stock Market Slide

Global stock markets fell on Monday as tensions in the Middle East drove up oil prices. US-Iranian talks remain stalled, with President Donald Trump rejecting an Iranian proposal to reopen the Strait of Hormuz over the weekend.

Oil prices surged, with Brent futures rising as much as 3% to $107.16 a barrel, bringing gains for the month to nearly 20%. This is a significant increase from pre-war levels in February, when oil prices were around half their current value.

Refined product prices have also spiked, reaching all-time highs due to a lack of refining capacity. This has raised concerns about inflation becoming embedded in pricing and wage decisions, leading central banks to respond with rate hikes.

The Reserve Bank of Australia is expected to raise interest rates on Tuesday, while the Federal Reserve is seen hiking for a second straight meeting in October, implying around 90 basis points of tightening by late next year. Despite this, strong US economic data has supported expectations for corporate earnings and underpinned equities.