Global stock markets plunged into the red on Monday as panicked investors counted the cost of Donald Trump’s chaotic new war in the Middle East.
With rocketing oil prices threatening to push up inflation around the world, forcing central banks to raise interest rates, share prices fell sharply as trading started for the week in Asia, Reuters reported. Japan’s Nikkei index fell 7 percent, after a 5.5-percent drop last week. The main South Korean index fell by 8.2 percent after falling more than 10 percent last week.
Brent crude, the worldwide benchmark for oil costs, rocketed up 27 percent Monday to $104.57 a barrel, marking its single biggest daily increase since 1988 and pushing prices into the triple digits for the first time since Russia invaded Ukraine in 2022, per Reuters and Axios.
“Faced with the worst oil supply shock since the 1970s, all eyes will be on Washington’s response,” RBC Capital Markets analyst Helima Croft told Reuters. “With no clear definition of what winning looks like, it is hard to forecast whether this will be a multi-week or multi-month conflict.”
“To date, neither White House policy prescriptions nor upbeat television soundbites have alleviated acute market anxiety about the shipping standstill and cascading shut-ins across the region,” she added.
Adding to the global market nerves is the White House’s failure to explain the rationale for Trump’s decision to join Israel in launching attacks on Iran on Feb. 28, or set out an exit strategy.
U.S. and Israeli strikes on Iranian targets have since claimed the lives of dozens of senior Iranian officials, among them Iran’s longtime supreme leader, Ayatollah Ali Khamenei.
Iranian forces have responded with attacks against regional oil infrastructure as well as vital trade channels like the Strait of Hormuz, through which it’s estimated up to a fifth of the world’s crude oil supply passes each year. At least eight U.S. service personnel have been killed, and Trump has warned that “there will likely be more before it ends. That’s the way it is.”
Amid widespread anxiety over rising prices across the U.S., the president has previously dismissed cost-of-living concerns as little more than a Democratic Party “hoax” while claiming to have created “the greatest economy in history.”
American voters don’t seem to agree with him, leaving the Republicans facing a battle to retain control of the House and Senate at November’s midterm elections.
The Daily Beast has contacted the White House for comment on this story.
