US stock markets experienced notable declines on Monday. The Dow Jones index fell by 1.1% compared to the previous trading day, closing at 48,942 points. The broader S&P 500 followed a downward trend, dropping 0.4% to about 7,201 points, while the technology-focused Nasdaq 100 decreased by 0.2% to roughly 27,652 points.
The underlying cause of the market weakness was the increasing escalation in the Strait of Hormuz. The situation remains unclear, with multiple conflicting statements from the involved parties. Reports indicate that the US began accompanying commercial vessels through the strait using a convoy labeled “Project Freedom”. Iran views this operation as a violation of a ceasefire, with reports citing that a US patrol boat was hit by Iranian attacks and a US warship was repelled. Furthermore, the United Arab Emirates stated that Iran struck oil tankers and the crude oil export complex in Fujairah.
In commodity markets, contrasting movements were observed. Oil prices rose sharply, with a barrel of North Sea Brent crude hitting $114.10 by the end of the day-a 5.5% increase from the previous day’s close. Gold, meanwhile, experienced a significant downturn, falling 2.1% to $4,519 per fine ounce, which translates to €124.23 per gram.
On the currency front, the Euro generally weakened, with one Euro priced at $1.1696, corresponding to the dollar offering 0.8550 Euros.
