US Military Action Against Iran Sparks Oil Price Surge and Stock Market Decline
The US launched its first military action in a month against Iran on Sunday, striking Iranian rocket launchers on the Strait of Hormuz. The move led to a surge in oil prices and a decline in stock markets.
The price of Brent crude rose 3.2% to $90.91 per barrel on Monday, while energy stocks such as Exxon Mobil and Chevron gained ground. However, nearly every sector within the benchmark S&P 500 lost value, with the index falling 0.4%. The Dow Jones Industrial Average fell 348 points, or 0.7%, and the Nasdaq declined 0.3%.
The US-Iran conflict has curtailed traffic in the Strait of Hormuz, which accounts for about 20% of the world's oil shipments. This has driven up energy prices and fueled inflation, making everything from gasoline to shipped goods more expensive.