Oil prices rose and stock markets around the world fell after the United States and Israel launched military strikes on Iran.
Concerns about disruptions to the flow of crude oil pushed oil prices up more than 7 percent on Monday.
The S&P 500 fell 0.7 percent as shares of airlines and other US businesses expected to see higher fuel bills soon. The Dow Jones industrial average lost 490 points and the Nasdaq composite fell 0.9 percent.
The Toronto Stock Exchange was down more than 200 points, or 0.6 per cent, on Monday, according to the announcement.
Gold rose as investors looked for a safe haven to own. Treasury yields typically fall when investors are nervous, but they rose on concerns that higher oil prices would worsen inflation.
Military strikes on Iran rattled global markets on Monday, with U.S. futures lower after markets in Europe and Asia fell. Fuel prices rose sharply.
Futures for the S&P 500 and the Dow Jones Industrial Average each fell about one percent.
The price of a barrel of the US benchmark rose to around USD$72 per barrel, a price not seen since the US summer driving season and the 12-day Israel-Iran war. Brent crude jumped nine percent to around $79.19 a barrel.
An increase in the price of a barrel of crude oil could appear within days or weeks at gas pumps as retailers are forced to pay more for new shipments of gasoline.
Travel sectors, from airlines and cruise operators to global hotel chains, have fallen.
But it wasn’t just oil. Natural gas futures rose six percent and fuel futures used for transportation and industrial purposes rose more than 14 percent.
Germany’s DAX fell 1.9 percent to 24,817.42, while the CAC 40 in Paris lost 1.7 percent to 8,435.80. Britain’s FTSE fell 100 percent to 10,808.53.
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Stocks fell in most Asian markets but rose in Shanghai, where higher oil prices lifted some oil company stocks such as CNOOC, China Petroleum and Chemical and PetroChina to the 10 percent limit.
The Shanghai Composite index rose 0.5 percent to 4,182.59, while in Hong Kong, the Hang Seng lost 2.1 percent to 26,059.85.
Japan’s Nikkei 225 index fell more than two percent early on. It ended 1.4 percent lower at 58,057.24. Shares in defense-related stocks including Mitsubishi Heavy Industries and IHI Corp offset other losses.
In India, which may face disruptions to access to oil due to war, the Sensex fell 1.3 percent.
Taiwan’s benchmark lost 0.9 percent and Singapore fell 2.3 percent. In Bangkok, a major tourism destination in the Middle East, the SET fell by four percent.
Markets in South Korea were closed for the holiday.
Gold, a safe haven for investment in times of uncertainty, rose 3.1 percent to around $5,408.10 an ounce.
The US dollar also gained, rising to 156.88 Japanese yen from 156.27 yen late on Friday. The euro fell to $1.1740 from $1.1762.
The conflict is likely to disrupt oil supplies from Iran and elsewhere in the Middle East. Attacks across the region, including on two ships traveling through the Strait of Hormuz, the narrow mouth of the Persian Gulf, have blocked oil exports to the rest of the world.
“Roughly one-fifth of global oil and LNG (liquefied natural gas) flows squeeze through the Strait of Hormuz. It’s not an obscure canal. It’s the aorta of the global energy system,” Stephen Innes of SPI Asset Management said in a commentary.
Prolonged disruptions to the flow of oil through the Middle East “would have huge implications for oil and LNG and every market everywhere. Energy is an input to all production,” Rabo Research said in a Global Economics & Markets report.
Iran exports approximately 1.6 million barrels of oil per day, mostly to China. If Iran’s exports are disrupted it may have to look elsewhere for supplies, another factor pushing up fuel prices.
The size of China’s strategic oil reserves is a state secret. But a recent report by John Kemp of Bays Research estimated them at 1.1 billion to 1.2 billion barrels — the equivalent of about 100 days, or just over three months, of imports.
The conflict’s impact on markets has been somewhat muted as attacks are expected with a massive build-up of US forces in the Middle East. So traders adjusted their positions taking that risk into account.
The conflict has shifted focus from issues surrounding artificial intelligence, which have dominated markets in recent months.
Treasury yields fell in the bond market as investors sought safe places for their money.
“When markets are weak, they don’t need a knockout punch. They need another weight on the bar,” Innes said.
Inflation at the U.S. wholesale level was 2.9 percent last month, more than the 1.6 percent expected by economists, a report on Friday hurt the broader market.
That could pressure the Federal Reserve to hold off on its cuts to interest rates for longer. Low rates stimulate the economy and prices for investments, but they also risk worsening inflation.
© 2026 The Canadian Press
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