The United States launched self-defense strikes against Iran in retaliation for the downing of a US Apache helicopter in the Strait of Hormuz. These attacks have put further strain on a fragile two-month ceasefire, raising concerns that renewed clashes may prolong the conflict in the Middle East and threaten shipping through the Strait of Hormuz.
Oil prices surged following the military action, with West Texas Intermediate rising as much as 1.9 percent to US$89.91 a barrel. The escalation has unsettled energy markets and stoked inflation worries, reversing a previous period where prices had fallen after Israel and Iran agreed to halt strikes against each other.
Global equity markets declined as investors reacted to the heightened tensions. Asian stocks fell and US stock futures dropped, with contracts for Wall Street benchmarks declining 0.3 percent and the Nasdaq 100 falling 1.1 percent. The downturn was further compounded by a rout in chip stocks and continued pressure on technology valuations.
These losses follow a brief rebound on Wall Street, which had been fueled by investors picking up cheaper assets after a sell-off sparked by bets on US interest rate hikes. However, the latest military developments have left investors on edge and dimmed hopes for an end to the months-long war that has upended global markets.