Global markets fell on Monday as the war in the Middle East drove oil prices sharply higher and revived fears about inflation and growth. Brent crude rose 10.4% to $102.29 a barrel, while US West Texas Intermediate gained 10.1% to $100.11. 

Both benchmarks hit intraday highs near $119.50, their highest levels since 2022, before paring gains later in the session. Even after that pullback, energy markets stayed at the center of investor concerns.

The jump in crude prices weighed on equities in the United States and Europe. The S&P 500 fell 0.5% by midday in New York, the Dow Jones Industrial Average lost 0.9%, and the NASDAQ 100 slipped 0.2%. 

The Stoxx Europe 600 dropped 0.7%, while the MSCI World Index fell 0.8%. Investors moved cautiously as higher oil costs raised the risk of persistent inflation, slower consumer demand, and reduced room for central bank easing.

Market attention also turned to supply risks across the Gulf. The conflict has disrupted tanker traffic through the Strait of Hormuz, a route that handles nearly one-fifth of global oil and liquefied natural gas flows. 

Saudi Aramco also started cutting output at two oilfields, while traders expected other major OPEC producers to trim supply as storage conditions tightened. Those developments lifted fears of a deeper energy shock with wider effects across financial markets.

Oil Prices Jump as Supply Disruptions Tighten the Market

Oil prices recorded the sharpest move of the session as traders reacted to the expanding conflict and its effect on global supply. Early in the day, Brent climbed to $119.50 a barrel, and WTI reached $119.48 before both benchmarks eased. 

Analysts said profit-taking and concerns about weaker growth helped pull prices off their highs. Even so, the market stayed under pressure because the supply outlook remained strained.

Since February 28, Brent has surged by as much as 65%, while WTI has jumped as much as 78%. This increasing pace has placed oil among the most significant market shocks in recent years. 

The price spike followed US and Israeli attacks on Iran and the growing risk of a prolonged regional conflict. The appointment of Mojtaba Khamenei as Iran’s new supreme leader also strengthened expectations that the country would maintain a hardline stance.

Saudi Aramco’s production cuts added to the market’s concern. The company also offered more than 4 million barrels of crude in rare tenders through the Red Sea port of Yanbu to offset part of the disruption linked to Hormuz. 

Analysts also expected output cuts from the United Arab Emirates, Iraq, and Kuwait amid rising pressure on regional storage. One Greek-operated tanker carrying Saudi crude has sailed through the Hormuz Strait, but the route remains severely constrained.

Stocks, Bonds, and Currencies Reflect Inflation Concerns

The rise in oil prices quickly fed into broader market pricing. Higher energy costs often raise transport, production, and household expenses. This dynamic can lift inflation while reducing growth, a combination that investors watch closely. Economically sensitive sectors faced the heaviest pressure, while energy stocks performed better as crude prices climbed.

Bond markets reflected the same concern. The yield on 10-year Treasuries held near 4.13%, while Britain’s 10-year yield rose two basis points to 4.65%. Germany’s 10-year yield stayed near 2.86%. Short-dated US yields also remained firm as traders reduced bets on near-term Federal Reserve rate cuts. Investors now see a greater chance that central banks will remain cautious if high oil prices continue to fuel inflation.

Currency markets showed a more defensive tone. The Bloomberg Dollar Spot Index was little changed, which indicated steady demand for the dollar during the sell-off. The euro fell 0.3% to $1.1588, the British pound slipped 0.1% to $1.3393, and the Japanese yen weakened 0.2% to 158.05 per dollar. 

In digital assets, Bitcoin rose 2.4% to $68,850.98, and Ether gained 3.2% to $2,021.89, while spot gold fell 1.4% to $5,099.26 an ounce.

Corporate Highlights

• Anthropic sued the US Department of Defense over a supply chain risk designation.

• Novo Nordisk agreed to work with Hims & Hers Health to sell obesity drugs.

• Hims & Hers Health surged 41% after news of the Novo Nordisk agreement.

• Live Nation Entertainment settled with federal antitrust authorities.

• Ticketmaster featured in that antitrust settlement outcome.

• Chevron edged higher as oil prices lifted energy shares.

• Exxon Mobil also gained as crude prices advanced.

• Jefferies Financial Group fell after a downgrade to equal weight.

• Morgan Stanley dropped 2.3% amid weakness in financial stocks.

• Citigroup lost 3% during the broader market decline.

• Carnival Corp. fell 7.3% as higher fuel costs hit travel stocks.

• Royal Caribbean Cruises dropped 6.3% on similar fuel-cost concerns.

The market now enters a crucial stretch. Investors must assess whether oil prices stay elevated, whether inflation expectations rise further, and whether the conflict expands. Those factors will likely shape stocks, bonds, currencies, and commodities through the rest of the week.

Also Read: US Stock Market Today: Global Markets Slide as Iran Conflict Lifts Oil and Delays Rate Cut Bets