Stocks, oil slip ahead of US threat of economic war against Iran

Oil prices dipped as stock markets fell on Monday, awaiting details of the US plan to impose severe economic sanctions on Iran to halt the Middle East conflict. Nvidia's earnings report on Wednesday and the central bankers' meeting in Jackson Hole on Thursday were adding to market caution. The Dow remained stable in early trading in New York, while the S&P 500 and Nasdaq were down.

London, Paris, and Frankfurt saw minor declines in the afternoon. Trade tensions, US-Canada failure to agree on a trade deal, Middle East unrest, and rising debt in developed nations were all making headlines. US Treasury Secretary Scott Bessent, who would hold a press conference later on Monday, outlined new actions against Iran, describing the US strategy as the "single greatest financial offensive marshalled against an adversary," or an "economic D-Day."

Brent crude prices were still above $90 a barrel despite a more than seven percent jump last week. While some may see relief in shifting from military to economic threats, confidence in opening a path to peace remains low. Central bankers' gathering in Jackson Hole aimed to provide clarity on US monetary policy, following Bessent's plan to buy back bonds to lower borrowing costs.

This move might face opposition from Federal Reserve Chairman Kevin Warsh, complicating the Fed's inflation-fighting efforts. Asian markets suffered due to fresh pressure on technology stocks, with Nvidia shares down by nearly one percent after raising prices for some chips, raising questions about the continuation of the AI boom.

Nvidia's report would also shed light on demand for AI infrastructure, Chinese competition, and the sector's future. South Korea's tech-heavy Kospi fell more than 3%, hurt by a steep drop in Samsung Electronics shares, while Tokyo and Shanghai also closed lower. Despite Shein's planned listing in Hong Kong, valued at nearly $27 billion, Hong Kong's market closed nearly 2% down.

Chinese tech giant Alibaba also announced plans to raise $10.2 billion in new shares for AI investments. Currency markets saw the Canadian dollar drop by 0.5% against the US dollar, continuing its decline over the past month after Ottawa vowed to retaliate against new US tariffs following failed trade talks.