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Cailianshe News, August 13 (Editor: Xiaoxiang)Geopolitics threatens to deal a fresh blow to investor confidence this week, as global markets try to shake off their most turbulent stretch of the year. On Monday, the focus of attention on stocks, bonds, currencies and commodities was on tensions in the Middle East.

Many industry insiders said that before the release of US CPI data on Wednesday this week, although US stocks have been trying to find direction, the development of geopolitical tensions in the Middle East has seriously suppressed risk appetite.

Even Tom Lee, a well-known optimistic forecaster on Wall Street and head of research at Fundstrat, warned on Monday that geopolitics is still standing out as the biggest risk facing the stock market in a week filled with a lot of other news that could move the market.

“The impact of the Iranian attack on the stock market is something we cannot predict in advance. This means investors need to remain vigilant at all times., focusing on the rapid impact of this geopolitical event on the market," Lee said in an interview with the media.

On Monday local time, John Kirby, spokesman for the White House National Security Council, said that Iran and its Middle East proxies may launch a major attack this week, and the United States and Israel are strengthening their military deployments to deal with emergencies.

Earlier, according to media reports, Israeli Defense Minister Yoav Galant also shared Israel's latest assessment in a call with US Defense Secretary Austin on Sunday. He told Austin that Iran's actions indicate that the country is preparing to launch a large-scale strike. The attack by Hezbollah and Iran may be larger than Iran's attack in April last year.

In April this year, Iran launched a large-scale missile and drone airstrike against Israel in retaliation for Israel's attack on the Iranian embassy in Syria. Israel and the United States largely thwarted the attack at the time.

but,As the world braces for news that Iran could launch another attack, some investors are pointing to important differences that could amplify the impact of the current potential attack on financial markets.

Is this time more likely to cause market turmoil?

First and foremost, after last week's worst performance in two years, stocks were still on edge on Monday as concerns about a U.S. recession and the unwinding of yen carry trades have yet to subside.

Keith Buchanan, senior portfolio manager at GLOBALT Investments, said in an interview:A new round of Iranian attacks on Israel could occur during thin trading volumes in August, which could exacerbate the stock market reaction.

Achilleas Georgolopoulos, an investment analyst at XM, also pointed out,Crude oil and gold prices climbed sharply on Monday, suggesting commodity traders are already paying close attention to any potential attacks.Strategists at the agency said that if Iran takes follow-up action, it could spark further gains in both asset classes.

Gold prices rose more than 1% on Monday, driven by safe-haven inflows, hitting its highest level since August 2. Jim Wycoff, senior analyst at Kitco Metals, said, "What we are seeing in the gold and silver markets today is some price support from bullish technical charts, some technical buying has been triggered. There is also some safe-haven demand due to increased tensions in the Middle East."

The increase in oil prices is undoubtedly more obviousOn Monday, U.S. WTI crude oil futures closed at $80.06 per barrel, up $3.22, or 4.2%. This is the first time that WTI crude oil has returned above the $80 mark in three weeks. "The market is increasingly concerned about regional conflicts there, and the expansion of the war may lead Israel to target Iranian oil, thereby hindering crude oil production in other important oil-producing countries in the region, including Iraq," said John Kilduff, partner at Again Capital in New York.

Bob Yawger, director of energy futures at Mizuho in New York, also said that if Iran launched an attack, it could lead to the United States tightening its ban on Iranian crude oil exports, which could affect 1.5 million barrels per day of crude oil supply.

In the stock, bond and foreign exchange markets, the rising risk aversion sentiment also pushed the US dollar and US bonds higher on Monday.The Bloomberg Dollar Index recovered all of Friday’s losses overnight.

As of the end of the New York session, the yields of U.S. Treasury bonds of all maturities fell across the board. Among them, the yield of 2-year U.S. Treasury bonds fell 3.8 basis points to 4.023%, the yield of 5-year U.S. Treasury bonds fell 5.7 basis points to 3.748%, the yield of 10-year U.S. Treasury bonds fell 4 basis points to 3.906%, and the yield of 30-year U.S. Treasury bonds fell 2.1 basis points to 4.201%.

In fact, although the overnight U.S. stock market did not fluctuate much at the close - the three major indexes rose and fell overall, the U.S. stock market still saw aA scene, news that some industry insiders speculated that Iran might attack Israel caused short-term panic.

As Lee acknowledged, a potential Iranian attack isn't the only news that could move the market right now. This week's financial calendar also includes several high-profile U.S. economic reports, as well as corporate earnings from U.S. retailers such as Walmart, which could help gauge the strength of the U.S. consumer as investors worry about a recession. These macro risk events could affect investor sentiment along with the Middle East geopolitical situation.

Buchanan noted that, to some extent, the threat of an Iranian attack is likely already priced in by the market. That means any further response will likely depend on the severity of the attack or the likelihood of sparking a wider conflict. “I think there is a tendency in the market to, as the saying goes, buy the rumor and sell the fact. However,If the impact of any development is greater than investors expect, the market could react more severely.”

Alex McGrath, chief investment officer at NorthEnd Private Wealth, believes that "PPI, CPI and retail sales this week will likely have a greater impact on our markets than any possible action by Iran," he said, referring to the U.S. July producer price index (PPI) to be released on Tuesday, the U.S. consumer price index (CPI) to be released on Wednesday and the U.S. retail sales data to be released on Thursday.