President Joe Biden's diplomatic visit to Israel on Wednesday has taken place against a backdrop of escalating Middle East tensions, which are stoking fears of potential violence and causing global markets to quiver. The president held talks with Israeli Prime Minister Netanyahu about Israel's airstrikes and potential invasion of Gaza, amidst a disputed explosion at the Ahli Arab Hospital in Gaza.
The likelihood of widespread Middle East conflict is increasing due to Israeli forces clashing with Iranian-backed Hezbollah forces in southern Lebanon. This escalation has been further fueled by Iran's call for an Organization of Islamic Cooperation-led oil embargo on Israel.
These geopolitical uncertainties have led to a nearly 3% rise in Brent and West Texas Intermediate crude oil benchmarks. Defense stocks are also surging, influenced by the ongoing Ukraine war and the U.S.'s response to Hamas attacks on Israel.
In response to the mounting crisis, President Biden may request a $100 billion aid package from Congress for Israel and Ukraine, largely intended for defense measures.
Meanwhile, the repercussions of these tensions are being felt far beyond the political sphere. Legal firm Davis Polk has withdrawn job offers from students blaming Israel for Hamas attacks. Billionaire Ron Lauder is also considering halting his donations to the University of Pennsylvania due to concerns over antisemitism.
Economic indicators are reflecting this global unease. The Consumer Price Index has been affected, markets have dipped slightly, and gold prices have seen an increase. However, Jordan's decision to cancel a key meeting following the Gaza hospital blast underscores the precarious nature of the situation.
As world leaders continue their attempts to navigate these turbulent times, all eyes will be on the outcome of Biden's diplomatic efforts in Israel and its potential impact on the global stage.
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