US stocks slumped on Monday, led by declines in interest-rate sensitive utilities shares, though gains in energy companies offset some losses. While markets remained on course to finish the month solidly in the green, U.S. futures declined and Asian stocks were set to follow Wall Street lower. Shares in Europe and Asia appeared mixed.
The volatility comes as tensions flared once again in the Middle East, with the US and Iran exchanging strikes for the first time in about a month. This escalation caused oil prices to climb during early Asia trading and Monday morning.
Additionally, investors are weighing the prospect of further monetary tightening and a potential US rate hike. The dollar held gains following hawkish comments from Federal Reserve Chair Kevin Warsh, fueling bets on a rate hike next month. These factors, alongside rising oil prices, have revived concerns regarding inflation.