Geopolitical Tensions and Soaring Oil Prices Shake Global Markets

U.S. stock index futures fell by over 1% amid inflation fears as oil prices surged due to Middle East tensions. Iran appointed Mojtaba Khamenei as supreme leader, signaling hardline control. Travel and bank stocks suffered, while defense stocks rose. Energy price hikes challenge global central banks.

On Monday, U.S. stock index futures dropped by more than 1% as escalating Middle East tensions sent oil prices soaring, intensifying inflation concerns. The announcement of Mojtaba Khamenei as Iran's new supreme leader signaled unwavering hardline control in Tehran.

Crude prices briefly hit near $120 a barrel but receded as G7 nations and Saudi Arabia explored ways to curb energy costs. The latest economic data showed a fragile jobs market coupled with increased activity, heightening stagflation anxieties.

Major travel and banking stocks plunged, while shares in energy firms rose. The volatility index reached its highest since April 2025, reflecting widespread market fears. Meanwhile, defense stocks gained, and central banks keep a close watch on spiking energy prices.

(With inputs from agencies.)