Global oil prices rose amid a new escalation in the Middle East, while Asian stock markets started the week lower. Brent crude rose 1.6% to $89.50 per barrel, Bloomberg reports, writes UNN.
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The rise in oil prices accelerated after the US military struck Iranian missile installations. According to Bloomberg, they were allegedly preparing to drop mines in the Strait of Hormuz.
Meanwhile, the MSCI Asia-Pacific Index fell 0.8%, while South Korea’s Kospi lost more than 3%. S&P 500 futures declined 0.5%, and Nasdaq 100 futures fell 0.7%.
Markets prepare for a possible Fed rate hike
Additional pressure on stock markets was caused by statements from Federal Reserve Chair Kevin Warsh about the need to bring inflation back to the 2% target.
Following his speech, traders raised their estimate of the probability of a Fed rate hike as early as next month to 60%. At the same time, Warsh did not explicitly state that he supported such a decision in September.
In the foreign exchange market, the dollar held its ground after its biggest gain in about a month, while the Japanese yen traded near the 160-per-dollar level.