Markets Drop and Oil Rises on Israel-Gaza Conflict and Hawkish Fed Stance

Asian markets fell and oil prices rose on worries about escalating Israel-Gaza conflict and interest rates.

Risk aversion grew as Fed chief Jerome Powell signaled a pause in rate hikes at next meeting but possibility of more later.

Traders fear further spikes in oil prices if Israel's bombing of Gaza leads to wider Middle East war involving Iran.

Powell suggested no rate hike at October meeting but room for more tightening if strong jobs and inflation data persist.

Powell's hawkish stance on rates weighed on Wall Street and Asian markets like Tokyo, Hong Kong and Shanghai.