Stocks Plummet as Oil Prices Soar Amid US-Iran Conflict

The US military launched its first attack in over a month on Iran, causing stocks to fall and oil prices to rise. The S&P 500 index dropped 0.3%, while the Dow Jones Industrial Average fell 0.7%. Energy stocks, however, saw gains, with Exxon Mobil rising 2.7% and Chevron increasing by 2.1%. The price of Brent crude rose 2.7% to settle at $90.49 per barrel on Monday.

The US war with Iran has been ongoing for over six months, curbing traffic in the Strait of Hormuz, which accounts for about 20% of global oil shipments. This has led to higher energy prices, fueling already stubbornly high inflation. The national average for gasoline in August has reached a record $4 per gallon every day.

Higher energy prices have weighed on household spending and consumer confidence. The Federal Reserve is expected to raise interest rates at its next meeting in an effort to cool inflation, which remains above 3%.