US-Iran Tensions Send Markets Reeling as Oil Prices Surge

The US military's strike on Iranian sites in the Strait of Hormuz sent shockwaves through global markets, with stocks plummeting and oil prices soaring.

The S&P 500 index fell 0.3%, while the Dow Jones Industrial Average dropped 0.7% and the Nasdaq composite slipped 0.1%. Energy stocks were a rare bright spot, with Exxon Mobil rising 2.7% and Chevron up 2.1%.

The Strait of Hormuz is a critical waterway that accounts for around 20% of the world's oil shipments, and the US military action has curtailed traffic in the area. Oil prices remain high as a result, with Brent crude rising 2.7% to settle at $90.49 per barrel on Monday.

The national average price of gasoline has been above $4 per gallon for every day of August, marking the most expensive month at the pump on record. Higher energy prices have contributed to already stubbornly high inflation, which remains well above the Fed's 2% target.