Oil prices climbed on Wednesday amid escalating geopolitical tensions between the United States and Iran. Reports that negotiations for a nuclear deal were collapsing reignited market fears of potential military conflict in the Middle East, a critical region for global energy production.
The primary concern for investors is the potential for disruptions to crude oil shipments through the Strait of Hormuz. This narrow waterway is a vital transit route for a significant portion of the world's oil supply, and any interference could lead to a sharp spike in energy costs, adding to existing inflationary pressures.
Market Impact: The S&P 500 fell 0.25% and the Nasdaq Composite dropped 1.18%, while the Dow Jones rose 0.71%. Bitcoin and Ethereum slid, with Bitcoin down 4.02% and Ethereum down 5.67% since the last session's close.