World Markets Jittery Over Israel-Iran Tensions

A trader stands beneath a screen on the trading floor displaying the Dow Jones Industrial Average at the New York Stock Exchange (NYSE) in Manhattan, New York City, September 13, 2022.
A trader stands beneath a screen on the trading floor displaying the Dow Jones Industrial Average at the New York Stock Exchange (NYSE) in Manhattan, New York City, September 13, 2022.

World markets faced turbulence on Friday as tensions rose between Iran and Israel following a strike earlier in the week that killed seven IRGC personnel in the Iranian embassy in Syria.

Iran has vowed retaliation against Israel, creating more tensions in a region already experiencing six months of war in Gaza and a ‘sitting war’ between Israel and Iran’s chief proxy, the Lebanese Hezbollah. Prime Minister Benjamin Netanyahu said Thursday his country would harm "whoever harms us or plans to harm us".

Shares retreated late on Thursday and in early trading on Friday amid warnings of a possible retaliatory attack by Iran and further military response by Israel. Oil prices also remained high, as the threat of supply disruptions in case of a prolonged conflict in the Middle East kept Brent futures above $90 a barrel, a level not seen since last October.

US futures were all lower partly reacting to Middle East tensions and also ahead of US job data to be announced on Friday.

Rodrigo Cartil, a forex strategist at National Australia Bank told Reuters, "There is a little bit of edginess in the air not helped by a spike in oil prices amid an increase in Israel-Iran tensions.” He added that, "The risk of escalation in the Middle East conflict is rising."