Global stocks stumble as Hormuz tensions revive inflation fears

On August 18, U.S. equities finished broadly lower, with all three major indices in the red and the S&P 500 briefly dipping below a closely watched technical support level. The main drag was a spike in geopolitical risk around the Strait of Hormuz, after belligerent comments about possible military action near Oman raised fears over a chokepoint that handles a large share of global oil shipments. That, in turn, revived concerns about an energy‑driven rebound in inflation. At the same time, parts of the market tied to artificial intelligence and memory chips remained resilient, cushioning the overall decline. Softer U.S. retail data added to worries about a mix of slowing growth and still‑elevated prices, a combination investors associate with stagflation. European and Asian equity markets also saw risk‑off flows as traders reduced exposure to cyclicals and financials. With global stocks still near record highs, the latest pullback is being read as both a geopolitical shock and a convenient trigger for profit‑taking, while markets watch whether oil prices and central bank policy expectations shift more decisively from here.