Rising tempo of combat in battle for Hormuz tests market's confidence that the worst is over on Iran
Financial markets remain relatively calm despite an escalation in military strikes between the US and Iran near the Strait of Hormuz. Analysts suggest that investors are currently displaying complacency regarding geopolitical risks in the region.
Why it matters
The Strait of Hormuz is a critical global oil transit point, and market reactions to conflict there have significant implications for global energy prices.
U.S. stock futures dipped late Sunday while oil prices rose, but didn’t spike, as investors kept their cool after a weekend packed with new fighting in the Persian Gulf.
Futures tied to the Dow Jones industrial average fell 100 points, or 0.19%. S&P 500 futures were down 0.27%, and Nasdaq futures lost 0.48%.
U.S. oil futures rose 3.2% to $73.70 a barrel, while Brent crude also climbed 3.2% to $78.45. Gold dropped 0.7% to $4,085 per ounce.
Bob McNally, founder and president of Rapidan Energy, told CNN that crude oil markets have been “blowing off this geopolitical risk for years” and described Sunday’s rise in prices as “pretty tame.”
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