Rising US–Iran tensions and $100+ oil set a cautious tone for Monday’s markets

Global markets on Monday are likely to be driven primarily by escalating geopolitical tensions between the United States and Iran, which have pushed Brent crude oil prices back above $100 per barrel for a third straight session. This renewed surge in oil prices is raising concerns about higher energy costs feeding into broader inflation, which in turn could pressure central banks—especially the U.S. Federal Reserve—to delay or slow any plans for interest-rate cuts. Investors are focused on the risk that tensions around the Strait of Hormuz could disrupt oil supply, a key shipping route for global energy markets. The lack of progress toward a US‑Iran deal and recent hardline rhetoric from U.S. political leaders have increased uncertainty, prompting investors to reduce risk exposure. This has already contributed to declines in major equity benchmarks, with the S&P 500 dropping to its lowest level since August and UK markets ending last week lower, signaling a cautious tone heading into Monday. On Monday, traders will be watching how sustained $100+ oil affects expectations for inflation, consumer spending, and corporate profit margins worldwide. Higher fuel and transport costs can squeeze both households and businesses, potentially slowing economic growth. As a result, energy-related stocks and sectors that benefit from higher commodity prices may see increased interest, while more economically sensitive and inflation‑vulnerable sectors could face additional selling. At the same time, demand for perceived safe-haven assets—such as government bonds and defensive equity sectors—may rise as investors seek protection from geopolitical and macroeconomic uncertainty.