Oil Prices Reach New Highs Above $112 Amid Market Volatility

Global Markets React to Tensions with Iran

Oil prices surged on Monday as President Donald Trump signaled that military action against Iran could escalate as soon as Tuesday, casting a shadow over hopes for a ceasefire. The threat of imminent strikes drove US crude prices above $112, while stocks whipsawed in a volatile session.

The S&P 500 managed to post its longest advance since January, with a 0.4% gain as of 4 p.m. New York time. The Dow Jones Industrial Average and the Nasdaq 100 also rose 0.4% and 0.6%, respectively. The MSCI World Index rose 0.3%. However, the market's gains were tempered by the looming threat of military action, which could have far-reaching consequences for the global economy.

According to market analysts, the best course of action for investors is to remain patient and wait for further developments. "It's clearly too early for market watchers to stop thinking about geopolitical risk," said Jeff Buchbinder at LPL Financial. "For now, we believe the best course of action for investors is to be patient."

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The uncertainty surrounding the situation in the Middle East has also had an impact on the US service economy. Data released on Monday showed that the US service economy expanded in March at a slower pace, with employment shrinking by the most since 2023 and input prices accelerating sharply.

Systematic investors are poised to flip back into equity-buying mode after slashing their exposure to multi-year lows during the recent market selloff, according to Goldman Sachs Group Inc.'s trading desk.

In other corporate news, Oracle Corp. named Schneider Electric SE executive Hilary Maxson as its chief financial officer to help the company navigate massive data center development plans and an accompanying cash crunch. Neurocrine Biosciences Inc. agreed to buy Soleno Therapeutics Inc. for $2.9 billion to gain access to a drug for a rare disorder that causes patients to have insatiable appetites.

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Madison Air Solutions Corp. is seeking to raise as much as $2.23 billion in its initial public offering, in what would be the biggest US listing of an industrial company in close to three decades.

In the markets, West Texas Intermediate crude rose 0.7% to $112.31 a barrel. The yield on 10-year Treasuries was little changed at 4.34%. Spot gold fell 0.5% to $4,655.04 an ounce. Bitcoin and Ether rose 3% and 3.6%, respectively.