Iran Conflict Sends US Stocks Plummeting Amid Oil Price Surge
US stocks opened lower on Monday due to renewed military clashes between the US and Iran, which pushed oil prices higher and added to inflation concerns. The Dow Jones Industrial Average fell by 346 points.
The developments also increased uncertainty around the Federal Reserve's interest-rate path ahead of its September meeting. Energy stocks benefited from the move in crude prices, with Halliburton and Valero Energy rising 3.04% and 1.84%, respectively.
Investors are now reassessing the prospect of further monetary tightening following Federal Reserve Chair Kevin Warsh's comments on inflation at the Jackson Hole symposium last week. Markets have increased expectations for a September rate hike, with CME FedWatch data showing traders pricing in nearly a 60% chance of a rate increase.