Global financial markets witnessed violent rebounds on Monday, following a strong jump in oil prices and a decline in most Asian and American stock indices, following the United States carrying out intensive airstrikes on Iranian targets, and Tehran responded by targeting several countries in the Middle East, which warned of a new wave of military escalation that threatens global energy supplies.
Oil about $79
Brent crude, the global benchmark for oil, rose 3.9% to $78.96 per barrel, while benchmark U.S. crude rose 4% to $74.26 a barrel.
The sudden jump comes after crude prices recently fell to pre-war levels with Iran, following an interim agreement between the two sides to end the conflict and ships resume transporting oil through the strategic Strait of Hormuz.
The United States launched several waves of strikes on Iran in the early hours of Monday morning, following an Iranian attack on a container ship in the Strait of Hormuz over the weekend, setting it ablaze and losing one of its crew members.
Asian stocks and Wall Street contracts fall sharply
In financial markets, U.S. stock futures fell, with the S&P 500 down 0.4%, the Dow Jones Industrial Average down 0.3%, and Nasdaq Composite futures losing 1%.
In Asian trading, the Nikkei 225 index in Tokyo lost 1.1% to 67,786.86 points, while the Kospi index in Seoul fell sharply by 5.6% to settle at 7,060.69 points.
Tech stocks and artificial intelligence developers were directly affected, with shares of South Korean semiconductor chip company SK Hynex falling 10.6% in Seoul, after jumping 13% on its Wall Street debut on Friday after raising $26.5 billion.
Its biggest rival, Samsung Electronics, fell 6.7%. Elsewhere in Asia, the Shanghai Composite lost 1.2% to 3,947.34 points, Australia's S&P/ASX 200 index fell 0.3%, and Hong Kong's Hang Seng index rose slightly 0.1%.
Inflation Fears and Expectations of Major Banks' Results
According to London-based economic analysts, fears of the impact of the continued fighting with Iran on the flow of crude oil globally are casting a shadow over the prospects for energy costs and inflation rates, as high bond yields are putting pressure on financial markets around the world, as inflation remains at high levels that may push the Federal Reserve and other central banks to raise interest rates again, slowing the pace of global economic growth and putting pressure on investment asset prices.
This geopolitical tension coincides with investors' attention to the upcoming corporate results season in the United States to justify record high stock prices.
This week will see the release of earnings reports from some of the largest US banks, including Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs and Wells Fargo, with several banks due to release their official reports on Tuesday alone to determine the next path of the markets.
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