US markets rose, shaking off concerns about rising oil prices

New York/Hong Kong
CNN
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Oil prices rose and the Israeli currency fell at the beginning of the week as investors reacted to it The war between Hamas and Israel.

Although Israel is not a major oil producer, Rising tensions In the oil-rich Middle East, it has spooked investors who have been selling oil in recent weeks.

Inflation, fear of a slowdown in the global economy, and a price correction that has risen in recent months have led to the price of US oil falling from about $95 a barrel in late September to just over $80 last week.

But on Monday, US oil prices traded 4% higher. Just above $86. Brent crude, the international benchmark, also rose nearly 4%, trading at around $88 a barrel.

Israel officially Declared war Hamas attacked on Sunday after the Armed Islamic Group launched a surprise attack on Saturday.

Officials say At least 900 people were killed in Israel More than 550 Palestinians killing.

“With the Israeli government warning of a long and difficult war, there are concerns that deep and sustained retaliatory strikes on Gaza could bring Iran into the conflict and have an impact on the flow of energy in the region,” said Susanna Streeter, head of the UN mission in Israel. Money and Markets at Hargreaves Landsdown, he wrote in a note.

The price of the Israeli shekel fell on Monday to 3.92 For the US dollar, it is the worst level since 2016.

The Central Bank of Israel said it would sell up to $30 billion in foreign currencies to stabilize the currency and “provide the necessary liquidity for the continued smooth functioning of markets.”

The Bank of Israel said in a statement that it would provide additional support worth $15 billion if necessary, saying that it “will continue to monitor developments, track all markets, and work with the tools available to it as necessary.”

US stocks rose on Friday on the back of surprising US strength Labor market reportreturned Monday afternoon after falling earlier in the trading session.

The Dow opened lower but by mid-afternoon Monday was up 174 points, or 0.5%. The S&P 500 rose 0.6%, and the Nasdaq Composite rose 0.4%.

Stocks initially fell on Monday morning amid global investors’ concerns that the conflict in Israel could spill over into the broader region, and that prolonged tensions in the Middle East could hurt the fragile global economic recovery. But the midday reversal suggests that Wall Street is adopting a wait-and-see approach for now regarding the risks that the conflict in the Middle East may pose to financial markets.

“Right now, there are a lot of possibilities and possibilities — and a real lack of clarity,” said David Donabedian, US chief investment officer at CIBC Private Wealth, adding that “markets will continue to look whatever they normally do.” “In”, including rising bond yields and the Federal Reserve’s future monetary policy decisions.

European stocks were also lower at the open on Monday as traders digested the news, then stabilized slightly, with France’s CAC 40 down 0.6%, while Germany’s DAX fell 0.7%. The FTSE 100 index in London rose 0.03%, supported by gains in oil company stocks.

In Asia, initial reactions among investors were mixed.

In mainland China, the Shanghai Composite Index fell 0.4% after reopening after a week of holiday. Meanwhile, Australia’s S&P/ASX 200 index ended 0.2% higher.

The Hang Seng Index in Hong Kong rose 0.2% when trading resumed after the morning comment Due to a typhoon, while markets in Japan and South Korea were closed for the holidays.

The key question for markets now “is whether the conflict remains contained or spreads to other regions, especially Saudi Arabia,” analysts at ANZ wrote in a report on Monday.

“At least initially, it appears that markets will assume that the situation will remain limited in scope, duration and oil price consequences. But higher volatility can be expected.”

—Robert North and Crystal Hoare contributed to this report.