Investors are bracing for a sharp decline in stock markets on Monday, as US measures against Iran could lead to retaliation. The situation in the Middle East has become a key influencing factor for markets, overshadowing the US economic data set to be released this week, Reuters reports.
Analysts at Interactive Brokers are convinced that stocks will react negatively to these events. So far, geopolitical turmoil has primarily affected oil prices, while stock indices have remained relatively stable, according to Reuters.
However, securities investors are concerned that rising oil prices could spark inflation in the US and disrupt the Federal Reserve's plans to lower interest rates. The latest estimates by policymakers indicate a slower pace of expected monetary easing than previously anticipated.
Along with concerns about tensions in the Middle East, this outlook is prompting market participants to turn to safer assets, such as the dollar and Treasury bonds.