Stocks edged lower and oil prices climbed in Monday trading in Asia, reflecting investor concern over potential economic fallout from the U.S. strikes on three Iranian nuclear facilities over the weekend.
Futures contracts for the S&P 500, indicating how the index might perform when markets open in New York, slipped by about 0.3 percent. The price of West Texas Intermediate, the benchmark for U.S. crude, gained roughly 3 percent. Gold, a traditional safe-haven asset, also rose.
Markets in Asia, the first to open after the strikes in Iran, were down. Stocks in Taipei, Taiwan, fell more than 1 percent. Benchmark indexes in Japan, Hong Kong and South Korea also dipped.
Traders were waiting for clearer indications of whether there would be an escalation in conflicts in the Middle East — particularly any moves by Iran to disrupt shipping through the Strait of Hormuz.
The Strait of Hormuz is a critical transit point for global oil supplies. Last year, about 20 million barrels of oil were shipped through the waterway each day, representing about 20 percent of the world’s total supply. Most of that oil was bound for Asia.
Places like Japan and Taiwan rely on the Middle East for almost all of their crude oil imports, meaning that any disruption to traffic through the strait could inflict a large economic blow. China is the largest purchaser of Iranian oil.
Oil prices, hovering around $76 a barrel, are expected to enter the $80 range, but if the risk of Iran blocking the Strait of Hormuz is seen as increasing, they will rise even further, said Takahide Kiuchi, executive economist at Nomura Research Institute. In that case, “the Japanese economy could be exposed to downside risks that exceed those of the Trump tariffs,” he said.
Other analysts expect fallout from the U.S. strikes to be relatively short-lived.
The oil market is better equipped to respond to shocks than it has been in the past because of spare capacity held by exporters, according to Daniel Hynes, a senior commodity strategist at ANZ Research. Geopolitical events involving producers can have a big impact on oil markets, but in recent years, prices have tended to quickly retreat as risks ease, Mr. Hynes said.
Daniel Ives, an analyst at Wedbush Securities, said there could be more volatility in stock movements this week. But, he said, the market may view the Iran threat as “now gone.” In that case, he said, “the worst is now in the rearview mirror.”
Joe Rennison contributed reporting from New York.
River Akira Davis covers Japan for The Times, including its economy and businesses, and is based in Tokyo.
The post Global Markets Dip as Traders Gauge Fallout From U.S. Strikes on Iran appeared first on New York Times.
