A renewed conflict between the US and Iran has led to an increase in oil prices, specifically Brent crude, which topped $83. This geopolitical tension raised concerns about disruptions to energy supplies and a potential surge in inflation, subsequently impacting financial markets.
The S&P 500 saw its back-to-back gains halted and fell due to these worries, along with a significant rout in the chipmaker sector. The rising oil prices and inflation fears have prompted investors to increase their bets on future interest rate hikes by the Federal Reserve.
The broader market reaction includes a sell-off in both stocks and bonds globally. The increase in oil prices is seen as a key factor driving up global bond yields and pressuring central banks to tighten monetary policy in an effort to combat inflation.
