Oil prices rose again Monday amid growing fears that escalating Iran-Israel tensions could disrupt global crude supply. U.S. benchmark crude gained 20 cents, reaching $73.18 per barrel, while Brent crude, the international benchmark, climbed 95 cents to $75.18 per barrel.
The conflict has intensified concerns over oil flow through the Strait of Hormuz, a vital chokepoint off Iran’s coast through which a significant portion of the world’s oil shipments pass. Any disruption here could tighten global supplies and keep prices elevated.
Mixed Asian Stock Market Performance
Asian shares traded mixed Monday as investors weighed geopolitical risks against economic data. Tokyo’s Nikkei 225 rose 1.3% to 38,307.74, and Seoul’s Kospi added 0.9% to 2,920.57.
In contrast, Chinese markets remained mostly flat following May’s data showing a 6.1% year-on-year jump in retail sales but slower-than-expected industrial output growth at 5.8%. Hong Kong’s Hang Seng slipped 0.1% to 23,864.20, and Shanghai’s Composite Index was nearly unchanged at 3,378.78. Australia’s S&P/ASX 200 fell 0.2% to 8,547.40.
U.S. Markets React to Rising Oil Prices and Conflict
Friday saw sharp losses on Wall Street after Israel launched attacks on Iranian nuclear and military sites. The S&P 500 dropped 1.1% to 5,976.97, the Dow Jones Industrial Average slid 1.8% to 42,197.79, and the Nasdaq lost 1.3% to 19,406.83.
Oil prices surged more than 7%, with investors concerned that broader conflict could slow Iranian oil exports despite existing Western sanctions.
Winners and Losers: Oil, Defense Stocks Surge While Travel Sector Suffers
Companies heavily reliant on fuel and consumer confidence took the biggest hits. Cruise operator Carnival fell 4.9%, United Airlines dropped 4.4%, and Norwegian Cruise Line Holdings declined 5%, reflecting worries about reduced travel demand.
Conversely, U.S. energy giants like Exxon Mobil and ConocoPhillips saw gains of 2.2% and 2.4%, respectively, as higher oil prices promise improved profits.
Defense contractors such as Lockheed Martin, Northrop Grumman, and RTX rallied more than 3%, fueled by expectations of increased defense spending amid geopolitical tensions.
Safe-Haven Assets See Uptick
Amid market jitters, gold prices climbed, gaining 1.4% on Friday and holding steady Monday. Investors also turned to Treasury bonds, although bond prices fell Friday, pushing yields up due to concerns that rising oil prices could accelerate inflation.
Inflation and Currency Market Outlook
Despite recent tame inflation near the Federal Reserve’s 2% target, fears persist that higher oil costs and tariffs could fuel inflationary pressures.
A positive consumer sentiment report from the University of Michigan on Friday eased some worries, showing improved U.S. consumer outlook after tariff pauses.
In currency markets on Monday, the U.S. dollar strengthened slightly against the Japanese yen, rising to 144.37 yen from 144.03, while the euro edged up to $1.1537 from $1.1533.
