Oil Prices Soar on US Strike in Strait of Hormuz

Oil prices surged on Monday after US forces struck Iranian rocket launchers in the Strait of Hormuz, marking the first military action in a month. The price of Brent crude rose 2.5% to $91.10 per barrel, while US benchmark crude oil was trading 3.6% higher at $86.40 per barrel.

The S&P 500 slipped 0.3%, and the Dow Jones Industrial Average dropped 282 points or 0.5%. The Nasdaq fell 0.1%. The yield on the 10-year Treasury rose to 4.75%, around the level seen two weeks ago when the Trump administration took the unusual step of announcing it would intervene in the bond market.

The strike has created economic pressures globally, including in the US, where the national average for gasoline in August has been above $4 per gallon every day in August for the first time ever, according to the AAA. This is outpacing even the enormous supply chain crunch during the COVID-19 pandemic in August 2022.