Oil spikes on renewed hostilities
Global oil prices jumped more than 6% on Wednesday as the US-Iran ceasefire collapsed into open military exchanges for a second night. Brent crude rose nearly $4 to $78.10 a barrel, erasing weeks of declines. The surge followed President Trump's declaration that the June 17 ceasefire was 'over' and the launch of US strikes on Iranian port cities including Bandar Abbas, a key transit hub on the Strait of Hormuz.
Markets slide on uncertainty
US stock futures fell sharply, with Nasdaq-100 and Dow contracts both down more than 1%. European and Asian markets also declined as investors priced in the risk of prolonged conflict disrupting global trade routes. The Strait of Hormuz carries about one-fifth of the world's oil supply, and Iran has demonstrated its willingness to use the waterway as leverage. Analysts at S&P Global warned that passage through the strait could remain severely restricted for months.
Inflation fears resurface
The oil price spike reignites concerns about inflation at a time when central banks were beginning to signal potential rate cuts. Higher energy costs could delay easing by the Federal Reserve and other major central banks. 'This is the worst possible outcome for markets that were already on edge about growth,' said Daniel Sycamore, a strategist at TS Lombard. 'A sustained disruption at Hormuz pushes inflation expectations higher and forces investors to reassess risk premiums.'