Bonds and Stocks Drop as Ceasefire Uncertainties Grow – Europe Market Wrap
Global stock and bond markets slumped as rising concern about Iran’s readiness to cooperate in Middle Eastern ceasefire talks pushed oil prices higher.
S&P 500 futures fell 0.6%, with around 48 hours until a US pause in strikes on Iranian oil facilities ends. As Iran continued to reject Trump’s call for talks, Axios reported that the Pentagon is preparing options for a “final blow,” including ground troops and a huge bombing campaign.
Brent resumed its ascent, increasing 3.2% to well than $105 per barrel. The action reignited inflation fears and pushed rates higher as money markets anticipated tighter monetary policy. The two-year Treasury yield jumped 4 bps to 3.93%. Gold fell below $4,450 per ounce, and the currency was little moved.
Memory chip manufacturers extended their losses in premarket trade in the US after Google hailed a solution that could lower the memory requirements for AI. In Europe, the Stoxx 600 halted a three-day rally.
The battle is reigniting the threat of inflation and stifling the global economy just when it was showing indications of strength, according to the OECD. Instead of the 2.8% it forecast in December, the organization now expects the average rate of inflation in major nations to rise to 4%, with the US rising even faster.
