After the United States’ recent conflict with Iran escalated between the US and Israel, the Stock Market suffered its biggest drop since the outbreak of the US-Israel conflict with Iran as investors reacted to oil prices rising and the continued uncertainty associated with geopolitics.
The Dow Jones industrial average dropped 450 points, the S&P 500 was down 1.7 percent, and the technology-heavy NASDAQ composite index fell 2.3 percent, making it officially in a correction after dropping greater than 10 percent from its most recent peak.
Oil prices have been a major concern for each of the global markets. Current prices for Brent crude oil have reached $107 per barrel, while WTI is priced at $93, and the average price for gasoline in the US is now close to $3.98 a gallon.
President Donald Trump said that although the spike in oil prices was “not as bad as I thought” and will calm as tensions with US-Iran cool down, mixed signals regarding US-Iran negotiations have kept investor sentiment throughout the day.
The Organization for Economic Co-operation and Development has also added to investor anxiety by projecting an average inflation rate in the US of 4.2 percent this year, significantly higher than previously estimated. Higher fuel and fertilizer prices are expected to contribute to inflation and supply chain issues in all global markets going forward.
