Global markets face selling pressure amid renewed geopolitical tensions

Global markets came under selling pressure on Monday as escalating tensions between the US and Iran and growing risks around the Strait of Hormuz fueled investor concerns.

The US Central Command (CENTCOM) said it launched a third round of attacks against Iran this week after Tehran opened fire on a commercial vessel transiting the Strait of Hormuz.

CENTCOM later said it carried out additional attacks to weaken Iran's ability to target commercial vessels in the waterway, further heightening geopolitical tensions in the Middle East.

Tehran also stepped up attacks on Gulf countries in retaliation, pushing oil prices higher.

Financial markets increasingly expect the US Federal Reserve to raise interest rates in September.

The Fed's monetary policy report to Congress said US economic activity continued to expand at a solid pace despite the Middle East crisis, while inflation rose due to higher tariffs, rising energy costs and growing demand for artificial intelligence.

Investors are awaiting testimony by Federal Reserve Chair Kevin Warsh before the House of Representatives and the Senate, as well as upcoming inflation data. Strong corporate earnings are also expected to increase risk appetite in the markets.

Brent crude surged 4.1% to $79.10 a barrel after Tehran said it had closed the Strait of Hormuz and intervened against ships transiting the waterway.

Rising oil prices strengthened expectations of tighter monetary policy, lifting bond yields and the US dollar while weighing on gold. The US 10-year Treasury yield rose three basis points to 4.59%, the US Dollar Index gained 0.1% to 101.1, and gold fell 1.3% to $4,055 per ounce.

Meanwhile, SK Hynix debuted on the Nasdaq at $170 per share, about 13% above its $149 initial public offering price. Nvidia shares rose 4% and Meta gained 6%.

On July 10, the Dow Jones Industrial Average rose 0.29%, the S&P 500 gained 0.42%, and the Nasdaq Composite added 0.29%. US stock indexes opened lower on Monday.

European markets advanced on July 10 after reports that the US and Iran had begun technical talks.

EasyJet shares jumped 14.3% after US private equity firm Apollo offered $7.6 billion to acquire the airline.

Recent forecasts indicate the European Central Bank is expected to leave interest rates unchanged in July but could raise them in September.

Germany's annual inflation slowed to 2.3% in June as energy price increases eased.

On July 10, the UK's FTSE 100 gained 0.24%, France's CAC 40 rose 0.15%, and Italy's FTSE MIB 30 added 0.44%, while Germany's DAX 40 fell 0.2%. European markets opened mixed on Monday.

Asian markets also came under pressure as geopolitical risks and sharp losses in technology shares triggered broad selling.

SK Hynix shares listed in South Korea fell 13.4%, while Samsung Electronics declined 9.2%.

Near Monday's close, Japan's Nikkei 225 was down 2.1%, South Korea's Kospi fell 8%, China's Shanghai Composite lost 1.5%, and Hong Kong's Hang Seng Index edged down 0.1%.