Impact on Markets
The recent attacks by Israel on Iran have significantly escalated geopolitical tensions in the Middle East. This has direct implications for global financial markets, including Wall Street and other international exchanges.
Wall Street and International Exchanges
U.S. exchanges such as the Dow Jones, S&P 500, and Nasdaq reacted to the tensions with substantial losses. The Dow Jones fell by 1.4 percent, the S&P 500 by 0.9 percent, and Nasdaq dropped by 1 percent. Similar declines were observed in other international exchanges, including the DAX in Germany.
Commodity Prices
Oil prices surged by up to 14 percent due to concerns over potential disruptions in the global oil supply network. These price increases positively affected stocks of oil companies like Exxon and Diamondback Energy, which rose by 1.6 and 3.5 percent, respectively.
Defense Stocks
Shares of defense companies such as Northrop Grumman and Lockheed Martin also benefited from the tense situation, rising by 2.3 and 3 percent.
Precious Metals and Bonds
Gold and silver were sought after as safe investment forms, leading to a price increase. However, investors did not retreat to U.S. bonds. Instead, yields rose slightly as investors sold these securities.
Geopolitical Impacts
The fear of a further escalation of the Middle East conflict is substantial, putting further pressure on the markets. Experts warn of a possible conflagration in the region. Capital market experts like Mohamed El-Erian emphasize that the recent attacks increase risks for economic growth and inflation, while the room for fiscal and monetary countermeasures is limited.
Conclusion
The events in the Middle East have significantly impacted global financial markets, reflecting uncertainty and the risk of escalation. While some sectors, such as oil and defense, benefit, the uncertainty leads to a withdrawal of investors from riskier assets.