Middle East conflict and rising Oil weigh on Wall Street

The Middle East conflict continues to dominate investors’ attention. In particular, tensions between Israel and Iran remain high: despite diplomatic efforts, the two countries have continued to exchange attacks even after the president’s Monday statements, raising doubts about the effectiveness of the negotiations.

Key Indices

In this climate of uncertainty, Wall Street opened in negative territory. Specifically, the S&P 500 fell by 0.7%, the Nasdaq Composite dropped 0.9%, and the Dow Jones Industrial Average lost 370 points (-0.8%). The declines affected both technology and industrial stocks, reflecting a general increase in risk aversion among investors.

The role of Oil

Rising oil prices also weighed on the markets. After falling the previous day, prices surged again: Brent crude rose over 3%, surpassing $103 per barrel, while West Texas Intermediate jumped about 4%, above $91 per barrel. The return above $100 contributes to inflation concerns and pressure on the global economy.

Analysts’ assessments

Despite the relatively optimistic tone from Donald Trump, analysts remain cautious. Scott Chronert, a strategist at Citigroup, emphasized that many uncertainties remain regarding energy prices and their macroeconomic impact. Speaking on Closing Bell: Overtime on CNBC, he noted that even with a moderate market correction, risks remain significant and warrant a prudent approach.

Escalation and Global Risks

The situation is further complicated by recent threats: over the weekend, Trump suggested a possible strike on Iranian energy infrastructure if the Strait of Hormuz was not reopened. Tehran responded, stating it could target U.S. infrastructure. This exchange of threats increases the risk of escalation, with potentially significant repercussions for financial markets and the global energy balance.