Bonds and Stocks Continue to Drop as Oil Rises – Europe Market Wrap
US stocks and Treasuries fell more, but Brent rose as prospects of a de-escalation in the Middle East conflict faded.
S&P 500 futures lost 0.8%, marking the benchmark’s longest weekly losing streak since March 2025. Brent rose 1.8% above $110 per barrel. Treasury rates increased across the curve, with the two-year rate rising 9 bps to 3.89%. Gold was expected to have its worst weekly decline since the outbreak began.
Sentiment fell on Friday as Axios reported that the US is considering taking over Iran’s Kharg Island, the Islamic Republic’s main oil export location, to exert pressure on Tehran to reopen the Strait of Hormuz.
Iran, meanwhile, continued to launch assaults on neighbouring countries despite Israel’s assurance that it would not target the Islamic Republic’s oil infrastructure.
In Europe, the Stoxx 600 reversed its 1% gain. UK gilts were under pressure, with the 10-year yield reaching its highest level since 2008. Money markets have fully priced in three interest rate hikes from the BoE and the ECB for 2026.
