Global markets rallied and oil prices fell nearly 7% on Monday as the U.S. and Iran paused strikes while discussing a potential interim cease-fire.
Key facts
- •Brent crude dropped 6.8% to $85.49 per barrel, and U.S. benchmark crude fell 7% to $83.06.
- •Fewer than 10 commodity vessels passed through the Strait of Hormuz daily over the weekend.
- •Chinese chipmaker CXMT shares rose 466% on their first day of trading in Shanghai.
- •Societe Generale analysts estimate every month without a resolution in the Red Sea adds at least $10 to the price of a barrel of oil.
- •The U.S. Federal Reserve is scheduled to meet this week amid concerns over rising inflation.
Global stock markets rose on Monday as oil prices declined nearly 7% following a weekend pause in hostilities between the U.S. and Iran. The de-escalation comes after two weeks of fighting sparked by Iranian attacks on ships in the Strait of Hormuz. Both nations are currently discussing a possible return to negotiations for an interim cease-fire deal.
By the numbers
Market Reaction to De-escalation
Brent crude fell 6.8% to $85.49 per barrel, while U.S. benchmark crude dropped 7% to $83.06 per barrel. Analysts noted that the retreat in oil prices eased pressure on equities and bonds that had been mounting throughout July. Meanwhile, major stock indices in Europe, Asia, and the U.S. futures market all saw gains on Monday.
Shipping and Supply Disruptions
Shipping data from Kpler indicated that fewer than 10 commodity vessels passed through the Strait of Hormuz daily over the weekend. Analysts warn that any recovery in traffic will likely be slow as shippers remain cautious about safety. Additionally, ongoing risks in the Red Sea and Ukrainian drone strikes on Russian oil sites continue to pose potential upside risks to global inflation.
Corporate and Economic Developments
Chinese memory chipmaker CXMT saw its shares soar 466% during its debut on the Shanghai technology board, reaching a market capitalization of approximately 3.3 trillion yuan. In the U.S., investors are monitoring corporate earnings, particularly regarding the sustainability of profits from artificial intelligence spending by companies like Alphabet and Nvidia.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by Daily Sabah.
