Geopolitical risks between the US and Iran drive oil prices higher and strengthen the USD, pressuring tech equities amid inflation concerns.
The USD surged this week as renewed military exchanges between the US and Iran reignited fears of prolonged inflation. Oil prices spiked, reflecting concerns over potential supply disruptions in the Middle East, while tech stocks faced downward pressure amid risk aversion.
Markets had previously focused on monetary policy expectations, but geopolitical tensions shifted attention to energy and inflation risks. The move reversed some of the prior week’s gains in equities, particularly in technology sectors sensitive to interest rate outlooks.
Investors are now weighing the impact of higher energy costs on global growth and central bank policy paths, with the USD benefiting from safe-haven demand.