Stocks and Bonds Fall as Oil Surge Revives Inflation Fears – US Market Wrap
A sharp rally in oil pushed stocks and bonds lower as investors grew more concerned that renewed fighting around the Strait of Hormuz will keep energy prices elevated and intensify global inflation risks.
Equities pulled back from record highs after Brent crude jumped about 6%, rising above $114 a barrel. The US and Iran exchanged fire in the Persian Gulf, while the violence also pulled in the United Arab Emirates. With oil close to a four-year high, Treasuries sold off, sending 30-year yields above 5%.
The US repelled Iranian attacks while helping two vessels pass through Hormuz. Separately, the UAE blamed an Iranian drone strike for a fire at Fujairah port and issued multiple missile alerts for the first time since the US-Iran truce began.
The latest escalation followed President Donald Trump’s plan to assist ships through the key waterway, after Iran warned it would target US forces operating near Hormuz. Trump warned that Iran would face severe consequences if it attacked American vessels in the region.
The Strait of Hormuz remains central to the conflict, with Iran using its control over the route to apply economic pressure while the US attempts to restore safe passage. The channel has been largely blocked since US and Israeli strikes on Iran began in late February.
