Global stock markets fell and oil prices rose yesterday as fears over the Middle East conflict persisted, despite US President Donald Trump’s extension of a deadline for Iran to reopen the Strait of Hormuz.
Iran gave no direct indication that it was ready for negotiation, and its Islamic Revolutionary Guard Corps reiterated it would continue to try to disrupt shipping in the region.
On Wall Street, all three main indexes were trading lower with consumer discretionary, financial and technology shares driving losses. Energy, consumer staples and utilities gained.
The Dow Jones Industrial Average fell 0.90pc, the S&P 500 lost 0.88pc and the Nasdaq Composite shed 1.33pc. The pan-European STOXX 600 index dropped 1pc. Germany’s DAX index fell 1.4pc while London’s FTSE 100 index shed 0.3pc. MSCI’s index of Asian shares excluding Japan fell 0.8pc overnight. MSCI’s gauge of stocks across the globe fell 0.93pc.
“Words alone aren’t cutting it right now, with President Trump’s extension of the pause on Iran energy strikes failing to lift the mood in any meaningful way,” Matt Britzman, senior equity analyst, Hargreaves Lansdown, said. “Tangible evidence of progress is what’s needed.”
The tech-focused Nasdaq Composite veered into correction territory after dropping 2.4pc on Thursday, leaving the index down nearly 11pc from its record-high close in late October.
“The unbridled optimism that propelled Nasdaq to all-time highs in the fourth quarter is fading as the macro backdrop sours and uncertainty about the impact of AI across the tech ecosystem clouds the horizon,” James St. Aubin, chief investment officer at Ocean Park Asset Management, said. Brent crude futures rose 2.36pc to $110.55 a barrel. US West Texas Intermediate futures were up 3.56pc at $97.84.
“Buy the dip; chaos creates opportunities for patient long-term investors,” Talley Leger, chief market strategist at The Wealth Consulting Group, said.
Government bond yields rose as investors grappled with a potential inflationary shock that could force central banks to raise interest rates. Yields rise as prices fall and vice versa.
The 10-year US Treasury yield, which sets the tone for borrowing costs around the world, rose more than 2 basis points to 4.4398pc.
Money markets now see a roughly 60pc chance the US Federal Reserve raises rates this year, a sharp change from late February when traders were betting on two cuts in 2026.
Germany’s 10-year bond yield rose to its highest level since 2011 at 3.13pc. In currencies, the US dollar was slightly higher against the major peers including the Japanese yen and Swiss franc.
The dollar was up 0.06pc to 159.865 against the yen and up 0.26pc to 0.79645 versus the Swiss franc. The euro was up 0.03pc at $1.153075. The US dollar index, which tracks the currency against six peers, rose 0.07pc for a fourth straight session of gains.
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