Global financial markets faced a tumultuous start to the week, marked by a decline in major U.S. indices and a surge in oil prices due to ongoing conflict in the Middle East and inflation concerns. On Tuesday, the Dow Jones Industrial Average fell 1.18%, while the S&P 500 and Nasdaq Composite dropped by 0.58% and 0.32%, respectively.
Geopolitical risks heightened as Iran-backed Houthis attacked Saudi energy facilities, leading to a spike in oil prices. Brent crude and U.S. crude saw significant increases, trading just below the $100 mark. This has compounded inflation fears, prompting central banks globally to consider interest rate hikes, with the European Central Bank expected to make a decisive move soon.
In the currency markets, the yen exhibited a strong rally as traders engaged in the carry trade strategy amid the prospect of a rate rise by the Bank of Japan. Meanwhile, copper prices reached a record high on tightening global supply, adding another layer of complexity to an already volatile economic landscape.
(With inputs from agencies.)