NEW YORK (AP) — Stock markets trembled around the world on concerns about whether the global economy could withstand a sharp rise in oil prices, which at one point soared to nearly $120 a barrel, the highest level since June 2022. The S&P 500 fell 0.8% early Monday, coming off its worst week since October. The Dow Jones Industrial Average fell 440 points, and the Nasdaq Composite Index fell 0.8%. If oil prices remain high for too long, households could face even worse inflation and businesses would face higher fuel costs. Losses widened in European and Asian stock markets. Japan’s Nikkei Stock Average fell 5.2%.
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Wall Street futures tracked declines in global markets early Monday. Crude oil prices temporarily soared To nearly $120 per barrel iran war The situation has escalated, threatening production and shipping in the Middle East.
Futures prices for the S&P 500, Nasdaq and Dow Jones Industrial Average were all down more than 1% before the opening bell, after falling more than 2% late Sunday.
Global markets were also hit, with Japan’s benchmark Nikkei 225 index down more than 5% and markets across Europe dropping 2% to 3%.
Stock prices of major US airlines continued to fall as soaring fuel prices were expected to squeeze profits. Delta Air Lines, American Airlines and United Airlines all fell more than 3% in premarket trading, adding to already double-digit losses since the U.S. and Israel launched attacks on Iran more than a week ago.
“The market woke up to the sound that every macro trader dreads: the oil alarm bell. And this time it wasn’t a polite chime. It was a fire siren,” Stephen Innes of SPI Asset Management said in a commentary.
If oil and gas prices continue to rise, they could have ripples around the world, further complicating matters for countries still adjusting to higher export tariffs on the United States under President Donald Trump.
As of 7:45 a.m. EDT, the price of Brent crude oil was $104.94 per barrel. Benchmark U.S. crude oil was trading at $103.27. Both were more than 13% above Friday’s closing price.
Senior officials from Southeast Asian countries were scheduled to meet this week in Manila, Philippines, to discuss ways to counter the shock from rising energy costs.
“Oil prices will peak at some point – they may have peaked already, they may peak further – but they are likely to remain volatile for weeks, possibly months,” said Swissquote’s Ipek Ozkardeskaya. “Eventually, energy prices are likely to fall, even if the war continues. However, during this period, high energy prices will reignite inflation globally and severely depress growth.”
The last time oil prices rose above $100 a barrel was in 2022, shortly after Russia invaded Ukraine.
The Iran war is now in its second week, involving countries and locations critical to the production and transportation of oil and gas from the Persian Gulf.
China’s special envoy for the Middle East, Zuijun, called for an end to the attacks and said attacks on non-military targets and civilians should be condemned. Meanwhile, South Korean President Lee Jae-myung warned against hoarding, panic buying and collusion between refiners and gas stations.
“I would like the government to proactively respond to the increasing instability in the financial and foreign exchange markets, which are the lifeblood of our economy,” Lee said. He said the government would put a cap on fuel prices.
Both sides of the war attacked new targets, including civilians, over the weekend. Bahrain accused Iran of attacking one of them. desalination plant It is essential for drinking water in Gulf countries. The state oil company declared force majeure after the country’s only refinery was attacked. Israel attacked an oil depot in Tehran, sending up thick smoke and triggering environmental alarm.
As of midday in European markets, Germany’s DAX was down 2.6%, Paris’ CAC40 index was down 2.7%, and Britain’s FTSE 100 index was down 1.9%. The only market to show an increase was oil exporter Norway, where the benchmark rose just 0.1%.
During Asian trading, Japan’s Nikkei Stock Average fell more than 7% early on, but recovered some of its losses and closed 5.2% lower at 52,728.72. South Korea’s Kospi fell 6% to 5,251.87.
The Chinese market, which is less sensitive to global trends, experienced more modest losses. Hong Kong’s Hang Seng Index fell 1.4% to 25,408.46, while the Shanghai Composite Index fell 0.7% to 4,096.60.
Taiwan’s benchmark fell 4.4% and India’s Sensex fell 2.3%. Other regional markets also fell sharply.
Early Monday, the U.S. dollar strengthened against other major currencies as it remains a safe-haven asset for investors bracing for uncertainty. It was trading at 158.45 yen, up from 158.09 yen late Friday. The euro rose to $1.1563 from $1.1556.
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Associated Press reporter Kim Tong-hyun contributed from Seoul, South Korea.
