Oil Prices Surge, US Indices Fall Amid Middle East Tensions

Oil prices surged on Tuesday, nearing the $100 per barrel mark, as tensions escalated in the Middle East. The price of Brent crude rose to $97.92 per barrel after Saudi Arabia retaliated with strikes against Houthi targets near the Bab al-Mandeb Strait.

The escalation in the conflict has led to a surge in oil prices, which are expected to remain within an $85-$105 per barrel range according to Eurasia Group. This comes as major US indices spent most of the day in the red before closing lower, with the S&P 500 losing 0.6 percent.

As concerns over inflation rise, Interactive Brokers' Jose Torres noted that escalating geopolitical tensions are dampening investor sentiment on Wall Street. The US Treasury bond yields have also moved higher, reflecting worries about inflation and the drag from heavy issuance of corporate and government debt.