Iran Tensions Curb Market Appetite, Oil Prices Rise – World Today News
Sydney, Australia – June 23, 2025 – Global markets are exhibiting cautious behavior as investors await Iran’s response to recent attacks, while Israel continues its military operations. An index of Asia shares has fallen to its lowest point since early June, reflecting the heightened uncertainty. Oil remains a central focus, with potential disruptions to the Strait of Hormuz – a critical global energy artery – threatening to considerably inflate prices.
Market Reaction & Oil Price Surge
US stock futures have declined, and Brent crude oil has increased by 2% following an earlier jump of 5.7% in Asian trading on Monday. The dollar has also strengthened against the euro and other major currencies,with US Treasury yields experiencing a slight rise.”This type of blurring has started to turn quickly to the new normal situation in the markets, so I expect to witness a relatively calm unless the tensions continue to escalate, which is clearly possible,” noted Josh Gilbert, a market analyst at EToro in Sydney. he further emphasized that even without immediate repercussions, the combination of rising oil prices and renewed market volatility will likely dampen risk appetite.
despite the current tensions, the S&P 500 remains only 3% off its February peak, and the dollar has risen over 1% since hitting a three-year low earlier this month. However, this stability is contingent on Iran’s next move.
Iran’s Response & Regional Implications
experts anticipate a response from Iran. Ben Zala, a lecturer in international relations at Monash University, stated, “It is very likely that Iran will respond to the United States in some way.” He warned that markets will be highly sensitive to any military developments, impacting stocks, bonds, and currencies due to the unpredictable nature of the situation.
Iran has vowed “severe consequences” for the american bombing and asserts its right to defend its sovereignty. Israel, meanwhile, has continued attacks targeting military sites within Iran.
Potential for Escalation & Financial Impact
SMBC Nikko Securities suggests that a continued cycle of retaliation could lead to increased US financial spending, perhaps driving up Treasury bond yields and impacting American stock prices. Historical precedents, such as the Iraq War in 2003 and the Gulf War in 1991, demonstrate how geopolitical events can influence market behavior.
Key Takeaways:
Heightened Uncertainty: Markets are bracing for Iran’s response to recent attacks.
Oil Price Sensitivity: The Strait of Hormuz remains a critical