Mortgage rates in the United States surged on Monday following heightened tensions between the U.S. and Iran, which drove oil prices higher and pushed Treasury yields upward. The conflict led to increased geopolitical uncertainty, prompting investors to seek safer assets like U.S. Treasuries, which in turn raised yields. This reversed a decline seen the previous week, as market participants had initially anticipated a cooling of tensions. The rise in oil prices also contributed to inflationary pressures, adding to the Federal Reserve’s dilemma on interest rate policy. For markets, the sharp increase in mortgage rates could dampen the U.S. housing market, which has been a key driver of economic growth. Higher borrowing costs may reduce homebuyer demand and slow construction activity. Traders should monitor the Fed’s response to inflation and geopolitical risks, as well as any further developments in the U.S.-Iran standoff. The interplay between energy prices, Treasury yields, and mortgage rates will remain critical for investors. The situation underscores the vulnerability of global markets to geopolitical shocks. For Gulf investors, rising oil prices could benefit energy sector equities and sovereign wealth funds, but increased volatility may also pose risks. Key indicators to watch include the Fed’s policy statements, Iran’s next moves, and the trajectory of oil prices. The coming weeks will test market resilience amid overlapping macroeconomic and geopolitical pressures.