Equities tumbled as crude oil surged above $100 a barrel for the first time since 2022, with the US-Israeli war against Iran showing no sign of easing and both sides appearing set to prolong the conflict. The dollar rose and Treasuries fell across the curve. Asia’s benchmark share index dropped as much as 5.6% — the most since April — with South Korea and Japan leading the declines. Equity-index futures for the US and Europe slid more than 2%, indicating the selloff is set to expand to other regions. The turmoil came as Brent crude oil jumped as much as 29% to $119.50 a barrel, adding to last week’s 28% surge, as the conflict entered a second week. West Texas Intermediate jumped 31%. Major oil producers also began curbing output and traffic through the Strait of Hormuz effectively halted. Both sides appeared to be digging in for a potentially lengthy conflict. Iran named the son of the late Ayatollah Ali Khamenei as its new supreme leader, while President Donald Trump said higher oil prices were a very small price to pay” for “safety and peace.” Treasuries sold off on concerns over quickening inflation with benchmark US 10-year yields turning higher for the year. Australia’s policy-sensitive three-year yield surged to the highest since 2011, while German bund futures slumped to almost a 15-year low. Selling swept across regions and asset classes as the geopolitical flareup added fresh stress to markets that are already under pressure from AI disruptions and worries about the potential for cracks in credit markets. The escalating crisis has left investors caught between the risk of renewed inflation stemming from elevated oil prices and signs of cooling in the US labor market. Arab states across the Persian Gulf and Israel continued to face incoming missiles and drones from Iran, which said it had the capacity to sustain the war for months. Israel struck fuel depots in Tehran and threatened the Islamic Republic’s power grid, sparking a warning from the Red Crescent about toxic acid rain. Trump is also weighing the option of deploying special forces on the ground to seize Iran’s near-bomb-grade uranium, as officials grow increasingly concerned the stockpile may have been moved, according to three diplomatic officials briefed on the matter. That is evident in the bond market. Just as investors closed their books on a month when mounting concerns over corporate risks fueled demand for the perceived safety of Treasuries, the US-Israeli attack on Iran raised a whole new set of worries — and triggered a different response. Instead of acting as a refuge, US government bonds took their cue from surging crude prices and yields shot up, with inflation fears taking center stage at a time when prices are already running higher than central banks would like. In other corners of the market, gold fell, pressured by a stronger US dollar and concerns over higher interest rates. Gold has come under pressure as spiking crude prices stoke inflation fears in the US, raising the likelihood that the Federal Reserve will leave interest rates unchanged for longer. Puck News Washington correspondent Abby Livingston and Bloomberg Opinion’s senior executive editor Tim O’Brien join David Gura and Christina Ruffini on “Bloomberg This Weekend” to discuss the implications for US foreign policy and the political dynamics surrounding Trump’s approach to Iran. Another key area of focus was the strength of the dollar. The Bloomberg Dollar Spot Index rose 0.5% on Monday. US stocks are facing a growing risk of a sharp selloff this year as the escalating war in Iran hurts global markets, according to veteran strategist Ed Yardeni, updating his outlook for what he describes as “fast-moving times.” Yardeni raised the probability of a market meltdown to 35% for the rest of the year, up from 20% previously. At the same time, he slashed the odds of a meltup — a rally driven more by investor enthusiasm than underlying fundamentals — to just 5% from 20%.
Nikkei -5.20% Hang Seng -1.71% CSI -0.99%% Shanghai -0.67%% Shenzen -0.70%
Eur$ 1.1529 CNH 6.9259 CNY 6.9211 JPY 158.70 GBP 1.3307 CHF 0.7806 RUB 78.7827 TRY 44.0847 WTI$ 115.56 +27.30% Gold 5,087 -1.59% BTC 67,444 +0.35% ETH 1,984 +1.32%
S&P -1.65% Nasdaq -1.75% EuroStoxx -2.52% FTSE -0.96%% Dax -2.68%% SMI -1.76%
Macro :
- Yardeni Raises Odds of US Market Meltdown to 35% on Iran War
- UAE President Tells ‘Enemies’ Country Is ‘No Easy Prey’
- Goldman Says Hedge Funds Add Short Bets on US Stocks Amid Rout
- Stagflation Risks Will Curb US Assets’ Haven Appeal: Macro View
- Traders Warn $100 Oil Is Imminent If Iran War Keeps Raging
- Hedge Funds Slash Tech Bets on Soaring Iran Fear: Equity Insight
- Iran President Says Forces Told Not to Attack Nearby States
- UK Proposes to Compensate China’s Jingye Steel, Sky Reports
- Jefferies Makes Bold Call as Nightmare of 2022 Haunts Clean Tech
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