After renewed arms struggle between the U.S. and Iran, oil prices are starting to rise spirally towards $100 a barrel. Fewer people are now hopeful of a peace deal soon, and the stock markets around the world are mostly in the red.

The rise of oil prices and worrisome security news in the Middle East have weighed on investor confidence, causing the US dollar to rise.

While there was a supposed ceasefire, the conflict has picked up in the area. One person was killed and dozens injured by a drone attack on the international airport in Kuwait.

Iran’s Foreign Minister Abbas Araghchi said on Wednesday that peace talks have made “no tangible progress.

Chris Beauchamp, chief market analyst at IG, said the situation has become more than a fragile ceasefire and is now evolving into a low-intensity conflict. Oil supply problems are becoming a “ticking clock towards doomsday” for global stocks in an unsolvable scenario, he said.

The current conflict is having a long-term impact on the growth of the world. Failure to reach a permanent truce before 2027 could cause a major economic impact, the OECD warned on Wednesday.

Even with a return to normal oil supply from the Gulf by the third quarter, the organization expects global economic growth to slow to 2.8 percent this year.

Stefano Scarpetta, the chief economist, warned of the dangers of recession if the disruptions last for long. But reducing investment spending, even in high growth sectors such as energy-intensive AI, would most likely increase global unemployment, he said.

Tech Rally Cools Amid Geopolitical Angst

Yes, AI has been on a high, and Wall Street is reflecting that enthusiasm, but geopolitical concerns are bringing a downtrend.

The shares of Marvell Technology jumped 32 percent on Tuesday after Nvidia’s CEO Jensen Huang described the company as the next trillion-dollar company.

But markets witnessed natural profit-taking on Wednesday. Tom Cahill of Ventura Wealth Management said that markets typically consolidate or move sideways after a month of strong performance, “to digest gains.

Strong US economic data is helping stave off a full-blown melt-up in risk appetite. The private sector added jobs, and the services sector activity grew more than expected in May

Investors are now fixating on Friday’s U.S. employment report, which will have a strong influence on whether the Fed can hold its benchmark rate steady or raise borrowing costs to fight inflation.

The Japanese yen has rallied for a short period in Asia today due to the rumors that the government had intervened in the market. The stock indexes in the tech-heavy Asian region beat the global drop, with the Taiwan Semiconductor Manufacturing Co. and Tokyo Electron leading the gains in Taiwan (+2 percent) and Tokyo (+2.5 percent), respectively.

In Asia, the Japanese yen experienced a brief rally against the dollar, fueled by rumors of government intervention. Tech-heavy Asian indices defied the global slump, with Tokyo’s Nikkei climbing 2.5 percent and Taipei rising 2 percent, driven by strong advances from the Taiwan Semiconductor Manufacturing Company and Tokyo Electron.

Key Market Snapshot (2015 GMT)

• Brent North Sea Crude: UP 1.9% at $97.81/barrel
• West Texas Intermediate (WTI): UP 2.4% at $96.02/barrel
• New York (DOW): DOWN 1.2% at 50,687.07
• New York (S&P 500): DOWN 0.7% at 7,553.68
• New York (Nasdaq): DOWN 0.9% at 26,853.98
• London (FTSE 100): DOWN 0.4% at 10,332.30
• Tokyo (Nikkei 225): UP 2.5% at 68,402.13
• Euro/Dollar: DOWN to $1.1599