US-Iran Conflict Sends Shockwaves Through Global Markets
The US-Iran conflict sent shockwaves through global markets on Monday, causing oil prices to surge and equity valuations to suffer. The Dow Jones Industrial Average plummeted over 300 points at one point in the session, while the S&P 500 and Nasdaq Composite also traded lower.
Brent crude oil futures rose sharply, climbing back above $90 a barrel for the first time in recent weeks as tensions escalated between the US and Iran. West Texas Intermediate crude futures also jumped to $85.30 a barrel.
The increase in energy prices adds to existing inflation concerns, compounded by Fed Chair Kevin Warsh's hawkish remarks at the Jackson Hole symposium. Market pricing now reflects a meaningful shift in expectations, with odds of a rate hike at the September 16 FOMC meeting climbing to 65.9%.
Mega-cap technology names performed mixed, with Tesla gaining over 4%, while Alphabet and Amazon declined more than 1%. Chinese stocks listed in the US came under broad selling pressure, with the Nasdaq Golden Dragon China Index falling more than 1%.