Stock markets in New York closed lower on Monday as investors reacted to escalating tensions between the United States and Iran. The Dow Jones Industrial Average fell 1.3% while the S&P 500 dropped 1.1%. The Nasdaq Composite ended the session down 1.4%. Trading volumes were elevated with more than 11 billion shares exchanged across major exchanges.
The decline followed comments from former US President Donald Trump on social media. He posted that Iran would face consequences if it retaliated against Israel. Trump stated that Iran would be destroyed if it launched attacks. His remarks came after Iran vowed to respond to an Israeli strike on its consulate in Damascus that killed seven officers.
Analysts noted that the geopolitical risk premium in equities has risen sharply. The price of Brent crude oil jumped 3.2% to $91.80 per barrel. This increase reflected concerns about potential supply disruptions in the Strait of Hormuz. The strait handles nearly 20% of global oil shipments.
The Federal Reserve’s latest meeting minutes released last week showed policymakers remain cautious about inflation. Investors are also watching upcoming US jobs data due on Friday. Economists expect the report to show the unemployment rate steady at 3.9% with 180,000 new jobs added.
Trump’s statements added to market volatility. Traders reduced exposure to risk assets including technology and financial stocks. The CBOE Volatility Index rose 15% during the session to 18.7, signaling higher expected market swings in the coming days.
Source: e24.no