Markets Jittery as Iran Weighs Response; Oil Cools, Dollar Climbs – US Market Wrap
US equity futures wavered as investors assessed whether an immediate Iranian response to US strikes on its nuclear sites would significantly disrupt oil flows from the Middle East. Crude prices trimmed earlier gains.
S&P 500 contracts dropped 0.1% after swinging between losses and gains. Brent crude pared an advance of as much as 5.7% to about 1.2%, trading below $78 a barrel. The dollar strengthened 0.5% against a basket of currencies, advancing against all Group-of-10 peers as traders hedged against the risk of further oil price gains.
Oil, which has risen more than 12% since the onset of the Israel-Iran conflict, remained the central focus as any interruption to traffic through the Strait of Hormuz raises the specter of a spike in energy prices and higher inflation. While Iran’s Foreign Minister Abbas Araghchi said the country reserved all options for a response, there haven’t yet been any signs of disruption to physical flows.
Global bonds retreated, led by Europe, as traders weighed whether the conflict in the Middle East would stoke inflation. German yields climbed across the curve, with 10-year yields up as much as five basis points to 2.56%, the highest level in a week. The rate on 10-year Treasuries rose two basis points to 4.40%.
