European stocks and U.S. futures declined as escalating U.S.-Iran tensions fueled fears of oil supply disruptions. Benchmark oil prices reached multi-month highs, prompting a reassessment of central bank rate cut projections. U.S. Treasuries fell, and the dollar strengthened.
Futures for the U.S. S&P 500 and Nasdaq indexes saw declines. Europe's STOXX 600 index experienced choppy trading, reversing earlier gains as oil prices fluctuated.
Qatar's energy minister warned of potential shutdowns in Gulf energy exports, predicting oil prices could surge to $150 a barrel and cause significant economic damage. This warning has rattled financial markets, with analysts noting the dramatic impact on energy markets and global economies.
U.S. crude oil and Brent crude futures rose significantly, on track for substantial weekly jumps, the largest since Russia's invasion of Ukraine. Traders have drastically reduced bets on U.S. Federal Reserve rate cuts this year, with yields on U.S. 10-year Treasuries increasing.
Europe, heavily reliant on energy imports, felt the impact most acutely. Traders now anticipate potential interest rate hikes from the European Central Bank by year-end, and reduced expectations for Bank of England rate cuts. Volatility is expected to remain elevated amidst persistent uncertainty.
The Middle East conflict has convulsed global markets, with investors seeking safety. The dollar index gained, while global stock indexes were set for significant weekly falls. Major Asia-Pacific stock indexes also experienced steep drops.