Oil Prices Soar as US Strikes Iranian Sites
The US military's attack on Iranian sites in the Strait of Hormuz has sent shockwaves through global markets. The price of oil rose, while stocks fell on Wall Street, with the S&P 500 index declining by 0.4% and the Dow Jones Industrial Average falling 305 points.
The losses were widespread across sectors, except for energy stocks, which gained ground due to rising oil prices. Exxon Mobil increased by 1.5%, and Chevron rose 1.4%. In contrast, Edison International dropped 22.8%, and PG&E fell 19.9% in the wake of potential California wildfire legislation.
The Strait of Hormuz is a critical waterway, accounting for around 20% of the world's oil shipments. The US war with Iran has curtailed traffic through this region, leading to higher energy prices. Brent crude rose by 2.8%, reaching $90.58 per barrel on Monday.
The national average gasoline price in August surpassed $4 per gallon for the first time ever, according to AAA data. This surge in fuel costs has fueled inflation, which remains above the Federal Reserve's 2% target. As a result, Wall Street expects at least one interest rate hike before year-end to combat rising prices.