Daily Fundamental Analysis: Global Markets Decline Following US Strikes as Tension in the Middle East Escalates

US Stock futures declined Monday after U.S. strikes on Iran, escalating Middle East tensions.

Dow futures fell 0.3%, while S&P 500 and Nasdaq 100 futures dropped 0.26% and 0.35% respectively.

U.S. crude oil jumped 2.7% to $75.86 per barrel, continuing recent gains, while Brent rose 2.74% to $77.74 per barrel.

The key concern is Iran potentially closing the Strait of Hormuz, which handles 20% of global oil flow. While Iran’s parliament supports closure, the final decision rests with their security council. Iran currently produces 3.3 million bpd, exporting mainly to China.

Major Asian indices declined as Japan’s Nikkei (-0.32%), South Korea’s Kospi (-0.41%), Hong Kong’s Hang Seng (-0.13%), China’s CSI 300 (-0.2%), and Australia’s S&P/ASX 200 (-0.43%).

In the Forex market, major currencies fell against the US dollar. EURUSD was down 0.5% to 1.1457, GBPUSD dropped 0.37% to 1.3400, the Japanese Yen fell 0.76% against the US dollar, USDJPY reached 147.29

Gold opened the week higher at $3,394 in response to the recent escalations in the Middle East, before it fell to $3,356 by the end of the Asian session. Silver prices are mostly stable, trading around $36 per ounce.

In the crypto market, Bitcoin fell to its lowest since May amid Middle East tensions and inflation concerns, triggering a broad crypto selloff. The cryptocurrency fell below $99,000 on Sunday before recovering to $101,000, while ether dropped to $2,200. The selloff stems from geopolitical and economic worries. Iran’s threat to block the Strait of Hormuz, potentially driving U.S. inflation to 5%.