U.S. Airstrike on Iran Raises Concerns Over Prolonged High Oil Prices

The recent U.S. airstrike on Iran's nuclear facilities has heightened concerns about the possibility of a prolonged period of high oil prices, which could impact the global economy and delay interest rate cuts. According to Ming Pao, the market's expectations for a short-term ceasefire have diminished, leading investors to sell off U.S. stocks ahead of the weekend. The CBOE Volatility Index (VIX), often referred to as the 'fear index,' closed at 31.05, marking its highest level since April last year when the U.S. announced 'reciprocal tariffs.' The Nasdaq closed at 20,948 points, down 2.15%, while the Dow Jones Industrial Average fell 1.73% to 45,166 points. Both indices have retreated more than 10% from their recent highs, entering correction territory. Analysts suggest that if oil prices remain at $100 per barrel over the next three months, it could significantly affect prices and household spending, putting further downward pressure on U.S. stocks, potentially leading to an additional 10% decline.