On Wall Street, the Dow Jones index fell two percent this week to 46,558 points, while the S&P 500 slipped 1.6 percent to 6,632 points, and the Nasdaq fell 1.3 percent to 22,105 points, Hrporfolio reports.
Investors are not inclined to riskier investments, as oil prices have jumped more than 35 percent in the last two weeks, since the US and Israeli attacks on Iran began.
Although US President Donald Trump has been saying for days that the US and Israel have won the war against Iran, the crisis in the Middle East is not abating. Iran continues to rocket Israel and neighboring countries and prevent tankers from passing through the Strait of Hormuz, which has shaken the oil market, causing the price of a barrel on the London market to break above the psychologically important level of 100 USD.
The rise came despite the International Energy Agency (IEA) announcing that 32 member countries would release a record 400 million barrels of oil from their reserves to help lower prices, in what the organization called the biggest oil supply disruption in history.
"The market realized that the Middle East crisis was not going to end as quickly as investors had hoped. So the motto was 'sell first, ask questions later,'" explained Ryan Detrick, strategist at Carson Group.
Investors are most concerned that a sharp rise in oil prices will cause a spike in inflation, which would force central banks to raise interest rates. This would negatively affect economic growth.
European stock markets also saw share prices fall this week. London's FTSE index fell 0.2 percent to 10,261 points, while Frankfurt's DAX slipped 0.6 percent to 23,447 points, and Paris' CAC fell one percent to 7,911 points.
