Geopolitical Tensions: Iran Strike Impact on Global Markets

What happened: On July 13, the U.S. targeted Iranian forces in response to attacks that killed two American service members, while Kuwait launched defenses against Iranian projectiles. Global markets reacted on July 14, with stocks falling and bond yields rising due to escalating Middle East tensions. Oil prices surged, with Brent crude hitting $112, as Iran expanded strikes on Gulf energy sites. Indian and European shares opened lower, and gold prices dipped. President Trump later announced the resumption of U.S. strikes against Iran.

Market impact: The escalating conflict drove oil prices higher, benefiting energy companies and commodity traders like Glencore, which expects a $3.3 billion trading profit in the first half. Defense stocks such as Lockheed Martin and L3Harris gained due to increased demand for defense supplies. However, broader markets fell, with Indian and European stocks subdued, as investors grappled with geopolitical risks and valuation concerns in AI-related stocks.

What to watch next: On July 15, keep an eye on oil prices and their impact on energy stocks. Watch for any further developments in the U.S.-Iran conflict and their effect on broader markets. Additionally, monitor the earnings season, with several major companies reporting this week, including Bank of America and Delta Air Lines.