Global Markets Plunge as US-Iran Tensions Escalate

Global markets experienced a downturn on Monday as fresh tensions between the United States and Iran sent oil prices soaring, while bond yields remained elevated after investors reassessed their expectations for a U.S. rate hike.

The Brent crude futures price climbed 1.4% to $89.38 per barrel following U.S. forces' strike on two Iranian launchers on Larak island on Sunday. In response, Iran launched attacks against U.S. forces stationed in Jordan, Fox News reported.

Investors reacted by boosting the likelihood of a September rate increase to 57%, causing short-term Treasury yields to jump sharply and flattening the yield curve. Despite this, Federal Reserve Chair Kevin Warsh emphasized that the central bank still has work to do to control inflation.