Global oil prices dropped sharply on Monday while the Dow Jones Industrial Average touched a record high after reports of a preliminary agreement between the United States and Iran boosted investor confidence worldwide.
Brent crude and US West Texas Intermediate (WTI) crude prices fell by nearly 5%, reaching their lowest levels since March. Analysts said hopes of reopening the Strait of Hormuz and easing tensions in the Middle East reduced fears of supply disruptions in global energy markets.
Meanwhile, Wall Street reacted positively to the development, with the Dow hitting an all-time intraday high. Investors shifted toward airline, travel, and technology stocks, expecting lower fuel costs and improved economic stability. Shares of major energy companies, however, declined as oil prices weakened.
Market experts believe the potential US-Iran understanding could help stabilize global trade routes and reduce inflationary pressure linked to energy costs. Investors are now closely watching further diplomatic developments and the upcoming US Federal Reserve meeting.
