"Financial markets are again following the cue of oil prices. They're cranking up the pressure because of worries that a long-term spike could exhaust households' ability to spend, grind down the global economy and push interest rates higher."
"Oil prices rose after Iran launched a new wave of attacks against Israel, American bases and countries around the region. The war's escalations are raising worries about how long disruptions will last for the production and transport of oil and natural gas in the region."
"While further escalation remains a risk, we think the more likely outcome is an increase in market risk aversion that likely lasts only a short time until investors can see a winding down of hostilities, according to Scott Wren, senior global market strategist at Wells Fargo Investment Institute."
Stock markets declined on Thursday as oil prices continued rising following Iran's attacks on Israel and American bases. The S&P 500 fell 0.6%, the Dow dropped 1.3%, and the Nasdaq declined 0.3%. Brent crude rose 3.9% to $84.56, while U.S. crude climbed 5.4% to $78.66. Gasoline prices at pumps increased 9% to $3.25 per gallon within a week. Market volatility stems from concerns that sustained oil price increases could reduce consumer spending, slow global economic growth, and raise interest rates. However, professional investors suggest the market may recover quickly, as historically it has bounced back following Middle East conflicts. Significant risk exists if oil prices spike to $100 per barrel and remain elevated.
Read at www.eastbaytimes.com
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