On Saturday night, Iran launched a massive attack on Israel using hundreds of drones and missiles. Despite some reports of damage to Israeli armed forces and at least one child wounded, the direct economic damage from the attack was relatively small. However, the impact on international trade and the wider economy could be significant, especially on the price of oil.
The White House announced that it helped Israel repel most of the drones and missiles in the attack, but this did little to calm market nerves. Analysts predict that the attack may increase the price of oil due to supply concerns, which was evident in the fluctuation of oil prices on Friday, with Brent crude rising and falling rapidly. The attack also affected other asset classes like gold and the dollar, which are considered safe havens.
The stock market reacted negatively to the threat of the attack, with the S&P500 index falling and the Vix index, which measures market volatility, rising significantly. While certain companies like energy producers and defense industries may benefit from the rise in oil prices, others may suffer as a result of reduced demand or increased costs. The potential escalation of conflict remains a key concern for investors worldwide.
While some investors had anticipated this attack due to signs of nervousness in financial markets earlier in the week, others were caught off guard by its severity. Overall, this event has added uncertainty to global markets and economies across various sectors such as cryptocurrency. As tensions continue between Iran and Israel, there is a possibility for further military action that could have even more significant repercussions on markets worldwide.
In conclusion, while Iran’s attack on Israel was partly expected due to market signs indicating nervousness earlier in the week, its immediate effects were seen across various sectors such as cryptocurrency. Its impact on global trade and wider economy could be significant especially on oil prices with potential escalation of conflict being a major concern for investors worldwide.
