Wall Street appeared ready to kick off the week on a positive note as oil prices continued to rise amid ongoing uncertainty surrounding the conflict in Iran. Futures for major indices—the S&P 500, Dow Jones Industrial Average, and Nasdaq—each increased by 0.6% before the market opened. This uptick followed a rough week for Wall Street, which experienced its longest losing streak in nearly four years, marking five consecutive weeks of declines.
U.S. crude oil futures surged by $1.20 to reach $100.84 per barrel, while Brent crude, the international benchmark, climbed 2.1% to $107.54 per barrel. These prices reflect a significant rise from levels observed before the conflict, when Brent was around $70 a barrel. Tensions escalated further as President Donald Trump warned of extensive destruction to Iran’s energy resources and critical infrastructure if negotiations to resolve the conflict did not advance swiftly. In a social media statement, Trump claimed that “great progress is being made” in talks with Iran but threatened to escalate military action if a deal was not reached and if access through the strategic Hormuz Strait was not restored promptly. This maritime route is crucial, with approximately one-fifth of the world’s oil flowing through it.
On the ground, the conflict showed no signs of abating. Iranian forces targeted a significant water and electrical facility in Kuwait, while an oil refinery in Israel was reportedly attacked. In response, Israel and the U.S. commenced a new wave of military strikes against Iranian positions.
The corporate landscape was relatively quiet on Monday morning, although shares of Sysco took a notable hit, dropping 5.7%. The company announced a major acquisition of Restaurant Depot, valued at over $29 billion. This merger aims to create a tighter connection between Sysco and its clients who depend on Restaurant Depot for immediate supply needs in the fast-moving “cash-and-carry wholesale” sector. Restaurant Depot shareholders are set to receive $21.6 billion in cash along with 91.5 million shares of Sysco.
International markets displayed mixed results, with Asian stocks closing broadly lower as concerns over escalating oil prices and the Iran conflict lingered. Meanwhile, European shares saw modest gains: France’s CAC 40 rose 0.4% by midday, Germany’s DAX added 0.3%, and the UK’s FTSE 100 increased by 0.9%. In Asia, Japan’s Nikkei 225 fell by 2.8%, finishing at 51,885.85, while Australia’s S&P/ASX 200 slipped 0.7% to 8,461.00. The South Korean Kospi dropped 3.0% to 5,277.30, and Hong Kong’s Hang Seng index declined by 0.8% to 24,750.79. The Shanghai Composite, however, saw a turnaround in the afternoon, rising 0.2% to 3,923.29.
In Japan, alarm bells were ringing regarding the weakening yen, with the dollar trading down to 159.51 yen from 160.32. The euro decreased to $1.1482 from $1.1510. Vice Finance Minister Atsushi Mimura indicated that speculative activities in currency markets were on the rise, emphasizing the government’s commitment to respond comprehensively, though he offered no specific plans for intervention.
The prevailing uncertainty regarding the Iran conflict has led investors to brace for potential inflationary pressures and worry about the long-term economic impacts on Asia, particularly regarding oil supply routes. “Although we do not expect the conflict to be protracted, we anticipate heightened volatility in the near term,” stated Xavier Lee, a senior equity analyst at Morningstar Research.
