Global financial markets were rattled on Monday as oil prices jumped nearly 5% and equities slid following renewed military escalation involving Iran, which targeted energy infrastructure in the Gulf region.
Brent crude rose sharply by $6.43, or 5.9%, reaching $114.60 per barrel, while U.S. West Texas Intermediate (WTI) climbed 4% to $105.91. The spike followed reports of drone strikes on an oil port in the UAE and a South Korean vessel hit in the Strait of Hormuz, a critical route for around one-fifth of global oil and gas shipments.
The escalation intensified fears after U.S. President Donald Trump pledged that the U.S. Navy would help force the Strait of Hormuz open, raising concerns of wider military confrontation.
Stock markets reacted negatively. The Dow Jones fell 1.03%, the S&P 500 declined 0.53%, and the Nasdaq slipped 0.41%. European equities also weakened, with Germany’s auto sector under pressure after proposed U.S. tariff increases.
Rising oil prices added to inflation worries, pushing bond yields higher and reshaping expectations for global interest rates. Analysts now see central banks, including the Federal Reserve, potentially holding or tightening policy longer than expected.
Currency markets remained volatile, with the yen swinging amid suspected Japanese intervention, while the U.S. dollar strengthened against major currencies. Gold prices also dropped more than 2% as investors shifted positions amid uncertainty.
