Stock Market to Plummet 20% if Oil Prices Break $125?...US Stocks Face 'Emergency' for July Crash

▲ USA, Iran, International Oil Prices, Bitcoin (BTC)/AI Generated Image

As the ceasefire between the US and Iran collapsed, fears of a July financial market crash resurfaced. Warnings also emerged that a stock market downturn and global recession could occur if international oil prices break $125.

According to crypto media outlet BeInCrypto on July 8 (local time), US President Donald Trump announced that the ceasefire between the US and Iran had ended. Dow Jones futures fell 1.1% in early trading. S&P 500 index futures dropped 0.87%, and Nasdaq index futures slipped 1.33%.

The US struck more than 80 Iranian targets after Iran attacked three merchant ships in the Strait of Hormuz. The Iranian Revolutionary Guard claimed to have attacked 85 US military facilities. The June ceasefire collapsed in less than half of the 60-day period set by the negotiators.

A risk-off trend also emerged, with funds shifting to safe-haven assets and crude oil. Brent crude surged over 6% to surpass $79 per barrel, and gold moved around $4,056. Bitcoin (BTC) fell to around $62,170, down approximately 1.6% over a 24-hour period.

The market had already been pricing in the risk of war since February. According to Charles Schwab data, the S&P 500 index fell 5% in March, and global stock markets excluding the US dropped more than 10%. After the June ceasefire, the buy rating for the S&P 500 index rose to an all-time high of 60%.

Charles Schwab strategists Michelle Gibley and Chris Ferrarone stated that they "do not see this as a time to aggressively increase risk assets." Charles Schwab presented a medium scenario of Brent crude at $75-100. For $100-125, they indicated the risk of stock market correction and economic stagnation in Europe and Asia, and for prices exceeding $125, the possibility of a global recession and a bear market with stock prices falling over 20%.

[Key Article Summary]

-Following the collapse of the US-Iran ceasefire, Dow Jones futures fell 1.1%, and Nasdaq futures dropped 1.33%.

-Brent crude rose over 6% to surpass $79 per barrel, while Bitcoin fell approximately 1.6%.

-Charles Schwab suggested the possibility of a global recession and a bear market with stock prices falling over 20% if international oil prices exceed $125.

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