Experts: how can the conflict in the Middle East affect the stock market?

Recent clashes between Israel and Hamas may cause significant damage to the stock market, as well as lead to an increase in inflation and a slowdown in economic development, experts say.

In addition, many large investors and strategists from Wall Street believe that the current situation may put the US Federal Reserve System in front of a difficult choice: either continue to increase the interest rate to curb inflation, or adjust economic policy to avoid a recession.

Here are the comments of six experts:

Bill Ekman, the head of Pershing Square, expressed his position on the social network X: «The world has become a much more dangerous place because we, the United States, have not kept our word. This must be stopped immediately, otherwise hell will come.»

Chamat Palihapitiya, head of Social Capital, also shared his opinion on Platform X: «Oil may take off again against the background of simultaneous conflicts in Israel and Ukraine, especially with the current production volume of 1.5 million barrels.»

Ed Yardeni of Yardeni Research said: «Middle Eastern geopolitical crises often lead to higher oil prices and lower stock prices. It is important to understand whether the current crisis will be short-term or turn into something more serious.»

Russ Mould, Investment Director at AJ Bell: «The constant increase in the cost of oil may cause additional inflationary pressures that investors will have to face sooner or later.»

Guillermo Santos, Head of iCapital's strategic department: «The expansion of this conflict to the leading oil-producing countries, especially Saudi Arabia, may provoke an increase in oil prices with negative consequences for the Western economy.»

Anti Tsuwali of State Street Global Markets stated: «The beginning of the conflict falls at a critical moment in the negotiations between Saudi Arabia and Israel. The Middle East crisis will clearly affect oil prices, which may cause instability in the stock market.»