Wall Street ended in red on Monday after renewed tension in the Middle East, sending oil prices higher.
The Dow Jones Industrial Average slid 0.26% to settle at 52,498.64. The S&P 500 fell 0.79% to 7,515.34, while the tech-heavy NASDAQ composite descended 1.55% to 25,873.18.
US President Donald Trump on Monday said that he was reinstating the blockade on Iranian ships through the Strait of Hormuz. He also stated that the Strait is open and will remain open for others.
“All other countries will have fair and open use of the Strait. The U.S.A. will be, from this point forward, known as ‘THE GUARDIAN OF THE HORMUZ STRAIT,’ but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World. The process and formation will begin immediately,” he added.
Following the announcement, Brent crude oil, the international standard, jumped 1% to $84.13 per barrel. West Texas Intermediate gained 1.57% to $79.39 a barrel.
Over the weekend, Tehran and Washington had exchanged airstrikes. Iran targeted US facilities and bases in Gulf nations and announced that the Strait of Hormuz is closed. Trump, however, rejected the claim, suggesting that the waterway is open for commercial operations.
In Asian markets, Japan’s Nikkei 225 index fell 0.29% to 67,050, while South Korea’s KPSPI Index declined 1.34% to 6,715.43.
Hong Kong’s Hang Seng lost 0.25% to 24,153, and the Shanghai Composite index trimmed 0.10% to 3,907.79.
The market trends on Tuesday will be decided by the geopolitical events as well as earnings of major companies like Bank of America, Wells Fargo, Goldman Sachs and Citigroup.
Federal Reserve boss Kevin Warsh will also appear before the House Financial Services Committee on July 14 to offer testimony on the central bank’s semi-annual monetary policy report.