Global stock markets fell on Tuesday as rising oil prices renewed concerns about inflation and the economic impact of the continuing tensions between the United States and Iran.

Investors had recently been encouraged by strong corporate earnings and softer U.S. economic data, but the latest increase in energy prices has created fresh uncertainty.

Brent crude rose above $90 a barrel, reaching its highest level since late July. U.S. crude also increased as investors worried that worsening tensions could disrupt energy supplies and shipping routes.

Higher oil prices can increase transportation and production costs for businesses and ultimately put additional pressure on consumer prices.

The market reaction was visible across major exchanges. Japan’s Nikkei 225 fell 2.5 percent, while South Korea’s Kospi dropped 1.6 percent. European markets also declined, with Germany’s DAX and France’s CAC 40 each falling about 0.5 percent in early trading.

Bond markets were also affected. The yield on the U.S. 30-year Treasury climbed to 5.3232 percent, its highest level in almost two decades, while the 10-year yield also moved higher.

Rising bond yields can increase borrowing costs for businesses and put pressure on stock valuations.

Investors are now watching energy prices and developments in the U.S.-Iran situation closely.

They are also awaiting the Federal Reserve’s meeting minutes and the upcoming Jackson Hole economic symposium for clues about future interest-rate policy.

Source: Reuters, Associated Press