Hormuz Deadlock Raises Oil & Yields, Stocks Drop – Europe Market Wrap
A recovery in US shares faded, while oil and bond yields surged as traders waited to see if hopes for a Middle East peace accord would convert into meaningful movement.
S&P 500 futures declined 0.4% after Nvidia’s earnings failed to spark additional advances in the AI trade. Brent rose 2% to above $107 per barrel. Iran’s Supreme Leader stated that the country must maintain its uranium, dampening hopes that the warring parties were near to reaching an agreement to reopen the Strait of Hormuz.
Treasuries fell across the curve as global yields fell sharply the day before due to expectations of a peace pact. The 10-year US yield rose 2 basis points to 4.61%, with JPMorgan CEO Dimon warning that interest rates could rise considerably further from their current levels.
Investors are also tracking economic activity in major economies amid rising energy costs. S&P Global’s data is carefully monitored because it arrives early in the month and is useful for identifying trends and turning points.
In the UK, businesses reported their first drop in output in almost a year, as the Iran shock and a growing revolt against PM Starmer hampered activity in the service sector. In the Eurozone, activity contracted at the fastest rate in two and a half years.
