Oil prices soar, stocks slide after Israel strikes Iran

Sharjah 24

a day ago

Oil prices surge
Oil futures skyrocketed more than 13 percent at one point before settling to gains of around seven percent, reigniting concerns about a renewed spike in inflation.
Stock market reaction
Following a downturn in Europe and Asia, Wall Street indices remained in the red throughout the day, finishing down more than one percent. Art Hogan, chief market strategist of B. Riley Wealth, noted, "After having a pretty solid run in May and the first part of June, markets found an excuse to take some profits."
Airline shares drop
Shares in major airlines plummeted as flights around the Middle East were suspended, further impacting market sentiment.
Safe-Haven assets rise
The dollar climbed higher, while gold, a safe haven investment, approached its record high of over $3,500 an ounce, having increased by around 30 percent since the year's start. David Morrison, senior market analyst at Trade Nation, remarked that the drop in equities and rise in safe-haven assets highlight the fragility of market sentiment amid geopolitical events.
Escalating tensions
On Friday, Iran launched ballistic missiles at Israel in retaliation for Israeli strikes targeting its nuclear facilities. Prime Minister Benjamin Netanyahu warned of "several waves of Iranian attacks" in response, with smoke seen rising above Tel Aviv.
Market sentiment
Despite a negative day for equities, analysts described the selling as orderly. Steve Sosnick of Interactive Brokers noted, "Investors are paring back some risk, but this is hardly a panicky sell-off," indicating a cautious wait-and-see approach among investors.
Implications for oil prices and inflation
Matthew Ryan, head of market strategy at Ebury, stated that further escalation could disrupt Iranian oil production, raising oil prices and complicating the decisions of major central banks regarding interest rates. Rising oil prices could weigh on global growth and maintain inflationary pressures for longer.