Oil Surge Drives Global Stocks Down Amid US-Iran Talks Stalemate

Global stocks fell on Monday as oil prices surged due to the ongoing stalemate in US-Iranian talks. The US President Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz, claiming Tehran was desperate to make a deal.

The rejection led to a 3% rise in Brent futures to $107.16 a barrel, bringing gains so far this month to nearly 20%. Oil prices have nearly doubled since the war started in late February, with refined product prices surging even more due to a lack of refining capacity.

Central banks have responded with rate hikes, with the Reserve Bank of Australia likely to be the next to tighten when it meets on Tuesday. Markets now imply a 68% chance the Federal Reserve will hike for a second straight meeting in October, with around 90 basis points of tightening priced out to late next year.