Military tensions flared in the Strait of Hormuz as fighting in the Iran war reignited, with strikes on ships and a UAE oil port testing a shaky cease-fire. The escalation sent investors scrambling for safety as concerns grew over potential supply disruptions in a critical global shipping lane that handles nearly a fifth of the world's oil.

Markets reacted swiftly, with Brent crude jumping 5.8% to $114.44 per barrel, marking the third-highest closing level of the year. The S&P 500 shed 0.4% Monday, with all sectors except energy finishing lower as investors worried rising energy costs could stoke inflation and pressure corporate profits across the broader economy.

Energy stocks gained ground while other sectors declined, reflecting the market's bifurcated response to the geopolitical crisis. The spike in oil prices comes as inflation concerns linger, potentially complicating monetary policy decisions. Analysts will watch whether the tension represents a temporary spike or signals sustained disruption in oil supplies from the Middle East region.