Tensions between Iran and Israel are escalating, with increasingly serious threats being exchanged between the two nations. A situation which is not without consequences for the American economy, already damaged. Stocks, cryptos and oil are experiencing significant disruption. These vital sectors, already weakened, now find themselves on the front line of this geopolitical instability.
Stocks and cryptos fall
Growing tensions in the Middle East between Iran and Israel are causing turbulence in global financial markets. The Dow Jones recently fell 248.13 points, falling to 37,735.11, a decrease of 0.65%. This downward trend is also observable at the level of the S&P 500 which fell by 61.59 points (1.20%), and the Nasdaq with a drop of 290.07 points (1.79%).
Technical indicators like the S&P 500 50-day moving average, which has fallen below a key support level, signal a potential worsening of the downtrend. These combined elements form a worrying picture for American financial markets.
The crypto market is not spared from this turbulence. The value of bitcoin, the flagship crypto, plunged to $61,564. The downward trend is also observed with altcoins and memecoins which are recording notable drops in their prices. The massive fall of these cryptos is the consequence of the widespread liquidation caused by increased tensions in the Middle East.
Oil could get expensive
Analysts from Citi Group and Lipow Oil Associates predict an increase in the price of oil, which could soar beyond $100 per barrel in the current context. This estimate takes into account the risk of disruptions in oil production in Iran. Andy Lipow, president of Lipow Oil Associates, declared that “Any attack on Iran's oil production or export facilities would drive the price of Brent crude oil to $100.”
The threat of a closure of the Strait of Hormuz, which is a strategic crossing point through which more than 16 million barrels of crude oil pass daily, intensifies concerns. Such an eventuality could propel oil prices to peaks between $120 and $130 per barrel.
A significant rise in oil prices could exacerbate inflation and dampen consumption and global economic growth. Companies heavily dependent on oil could see their operating costs increase, reducing their profit margin and worsening the general economic situation. In the current environment, investors must remain alert and exercise caution in the financial markets.
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