Stocks Slide, Oil Surges as Trump Bets Against An Iran Ceasefire; Middle East Tensions Rattle Markets – Europe Market Wrap
US equity futures dropped and oil rallied as sentiment turned negative on fears of escalation in Israel’s war with Iran after US President Donald Trump played down the likelihood of a ceasefire.
S&P 500 contracts fell 0.5% following the US benchmark’s rebound in the previous session. Brent crude rose 1.6%. The dollar and gold were little changed, while US Treasuries edged higher.
Sentiment shifted again as investors reacted to fast-moving developments in the Middle East and their potential impact on global markets. While traders had earlier shown confidence the conflict would be contained, oil remains in focus, with a commodity that had hovered near pandemic-era lows emerging as an unexpected source of inflation.
As Israel and Iran continued to attack one another, Trump left the Group of Seven leaders’ meeting in Canada early to deal with the conflict. Though he hasn’t outlined what comes next. Trump said in a social media post that he hasn’t reached out to Iran for peace talks “in any way, shape or form.”
The Bank of Japan left its benchmark rate unchanged on Tuesday, as expected by economists, and decided to taper its bond purchases at a slower pace next year in a sign of caution. The yen erased losses after the decision, while longer-dated Japanese government bond yields were modestly higher.
