The intensifying war in Israel put pressure on global stock markets yesterday. Oil prices shot up sharply as concerns about oil supply in the area are mounting.
Stocks suffer as tension escalates in Israel
Following an explosion at a Gaza hospital yesterday, global stock markets remained under pressure and oil rose sharply. The explosion resulted in mass casualties and complicated diplomatic efforts to stop the Middle East conflict.
The rocket attack that killed hundreds of people is triggering further worry over the escalation of the tension in the area. Palestinian officials blamed the Israelis for the attack, while Israel said responsibility lay with a failed rocket launch by Palestinian militants. Both parties denied responsibility.
Following the cancellation of a summit with the senior officials of Egypt and Jordan due to the attack on the Gaza hospital, US President Biden paid a quick visit to Israel to show his support.
Oil prices soared on supply concerns
The crude oil market had already received a boost on Tuesday evening after data from the American Petroleum Institute indicated that US inventories fell by a considerable 4.4 million barrels in the week to October 13. The numbers temporarily brushed aside concerns about a decline in fuel demand in the world's largest consumer.
Mega caps led loses in stock market
In the stock market, mega caps led the losses, with Nvidia Corp. falling 3%. In the banking sector, Morgan Stanley plunged about 7% as published earnings disappointed due to a significant drop in investment banking.
Another company significantly affected by the Middle East conflict is United Airlines Holdings Inc. It fell 8% after announcing that the Israel-Hamas war and higher jet fuel costs would weigh on future results.
Morgan Stanley monthly chart, October 19, 2023. Source: CAPEX.com WebTrader.
- A Gaza hospital explosion put pressure on global stocks.
- US President Biden visited Israel after cancellation of a summit due to the war.
- The price of oil rose sharply as oil supply worries were heightened.
- Data from the American Petroleum Institute indicated on Tuesday that US inventories fell by 4.4 million barrels in the week to October 13.
- This indication of a fall in inventories also helped to boost prices.
- Stocks of companies like Nvidia and United Airlines Holdings Inc. suffered large drops.
Sources: Bloomberg, Reuters