Escalating Israel-Gaza Conflict Threatens Oil Supply, Global Growth as Investors Brace for Impact
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Escalation of Israel-Gaza conflict could lead to higher oil prices and potential global economic downturn. Iran's involvement could remove 1-2 million barrels per day of oil supply.
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A spike in oil prices could halt disinflation and cause more pain for bond investors. Inflation expectations still above central bank targets.
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Stronger dollar is possible if oil spikes, but dollar strength could reverse if high oil causes US recession.
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Emerging markets already dampened by recent events, but contagion expected to be limited for now. Higher oil prices would hurt importing countries.
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Tech stocks could suffer if higher rates contain inflation, while defense stocks may outperform. Air travel would be negatively impacted.