US-Iran Airstrikes Rattle Global Markets and Send Oil Prices Surging

A Fragile Peace Shattered Over the Strait of Hormuz

Just when global energy markets had begun to breathe a sigh of relief, the U.S.-Iran conflict roared back to life. Oil prices had recently slipped back to the levels seen before the war with Iran began, after the two sides reached an interim agreement to end the conflict and ships resumed transporting oil through the Strait of Hormuz. That fragile calm didn't last.

The United States launched several waves of strikes on Iran early Monday morning following an Iranian attack on a container ship in the Strait of Hormuz that set the vessel ablaze and left one crew member missing over the weekend. Iran retaliated by targeting countries across the Middle East. The rapid escalation immediately rattled investors around the world, sending energy prices sharply higher and leaving stock markets deeply divided.

Oil Spikes, Wall Street Splits

The price of Brent crude, the international standard, climbed as much as nearly 5% early on Monday before falling back. By midday in Europe, it was up 3.4%, or $2.58, at $77.72 per barrel, while U.S. benchmark crude added 3.5%, or $2.48, to $72.92 per barrel. Energy companies were among the few clear winners on Wall Street — ExxonMobil, ConocoPhillips, and Chevron all gained around 1% before the opening bell as fighting in the Middle East pushed oil prices higher.

The broader picture on Wall Street was far less optimistic. Futures for the S&P 500 fell 0.3%, the Dow Jones Industrial Average was unchanged, and Nasdaq futures tumbled 0.8%, with chip and memory companies dragging indices down — SanDisk, Western Digital, and Micron all falling close to 5% in premarket trading.

Asia Bears the Brunt

Asian markets took the hardest hit. Tokyo's Nikkei 225 index lost 1.9% to 67,242.73, while Seoul's Kospi declined 9% to 6,806.93 — its lowest level since early May. South Korean tech giants were hammered especially hard. Shares in memory chipmaker SK Hynix, which had soared 13% in its Wall Street debut on July 10, slumped 15.4% in Seoul, while its bigger rival Samsung Electronics sank 10.7%.

Hong Kong's Hang Seng edged 0.2% higher to 24,212.36, while the Shanghai Composite index shed 2.1% to 3,913.79. European markets managed to stay mostly flat, with Germany's DAX, France's CAC 40, and Britain's FTSE 100 all posting negligible gains or losses — a sign that investors there were watching cautiously rather than panicking outright.

The Bigger Economic Threat

Worries about how continued fighting with Iran will affect the global flow of crude are clouding the outlook for both energy costs and overall inflation, with high bond yields already weighing on financial markets worldwide — since more expensive oil and high inflation could push the Federal Reserve and other central banks to raise interest rates. Higher rates can keep a lid on inflation, but they also slow the economy and hurt prices for all kinds of investments.

That's the bind markets now face. Every new wave of strikes in the Strait of Hormuz doesn't just affect tanker routes — it ripples through gas pumps, grocery bills, and retirement accounts. With the interim ceasefire now in tatters and both sides trading blows across the Middle East, investors and policymakers alike are watching closely to see whether diplomacy can reassert itself before the economic damage deepens further.