Oil Prices Plunge as Middle East Tensions Ease
Global stock markets rebounded on Monday as tensions in the Middle East eased. The pause in hostilities sent oil prices plummeting, with Brent crude dropping 6.3% to $90.70 a barrel and US crude falling 5.7% to $84.12.
The lull in fighting over the Strait of Hormuz was triggered by Iran's decision to halt its own attacks as long as the United States does the same, according to Reuters. The US military is reportedly concerned about dwindling supplies of ammunition.
Stock markets across the globe staged a relief rally, with Europe's STOXX 600 climbing nearly 0.5% and touching its highest level since July 7. Economically sensitive retail and travel stocks rallied more than 2%, but oil stocks weighed on the broader market.
The US central bank's decision is due on Wednesday, and markets imply a one-in-three chance of a rate hike. However, analysts doubt that Chair Kevin Warsh would favour such a move, citing concerns about inflation risks.