(Bloomberg) — Bonds slumped and stocks extended losses while Brent oil resumed its advance as brief hopes of de-escalation in the war in the Middle East subsided.
S&P 500 futures fell 0.5%, with the benchmark set for its longest streak of weekly losses since March 2025. Brent advanced 0.9% toward $110 a barrel. Treasury yields rose across the curve, with the two-year rate climbing eight basis points to 3.87%. Gold steadied, but remained on track for its worst weekly drop since the onset of the pandemic. The dollar gained 0.3%.
A sense of relative market calm was interrupted amid a report from Axios that the US is considering a high-risk move to take over Iran’s Kharg Island, the nation’s key oil-export site, to put pressure on Tehran to reopen the Strait of Hormuz.
Iran, meanwhile, pressed ahead with attacks on neighboring states even after Israel signaled it would refrain from hitting the Islamic Republic’s energy infrastructure.
Traders are parsing every geopolitical headline after the conflict upended energy supply chains, causing gasoline and jet fuel prices to surge. Central banks across the world have warned about the inflationary risk, prompting traders to ramp up bets on tighter monetary policy.
“We’re in a vulnerable environment at the moment with possible interest-rate hikes and Brent above $100,” said Nicolas Forest, chief investment officer at Candriam in Brussels. “If the Stoxx 600 and the S&P 500 are not able to hold technical levels today, this might signal upcoming stress.”
In Europe, the Stoxx 600 erased earlier gains of 1%. UK gilts remained under pressure, with the 10-year yield rising to the highest level since 2008. Money markets are fully pricing in three interest-rate hikes by the Bank of England and European Central Bank for 2026.
“The market was wrong at the start of the conflict, thinking it would end swiftly,” said David Kruk, head of trading at La Financiere de l’Echiquier in Paris. “Investor sentiment has clearly shifted into a more bearish positioning.”
US equity traders are meanwhile bracing for an unusually large tally of options expiring on Friday, which risks injecting even more volatility into the market.
Roughly $5.7 trillion in notional options tied to individual stocks, indexes and exchange-traded funds are set to expire, the largest March expiry in Citigroup Inc. data going back to 1996.
Corporate News:
FedEx Corp. shares rose 9% in premarket trading after the courier raised its full-year profit forecast, signaling that the firm’s plan to restructure its delivery network is gaining traction. Unilever Plc is in talks to sell its food business to McCormick & Co., in what would be the biggest overhaul of the owner of Hellmann’s mayonnaise since it was founded almost a century ago. Novartis AG agreed to buy an experimental breast cancer drug from Synnovation Therapeutics for as much as $3 billion to bolster its oncology pipeline. ByteDance Ltd. has agreed to sell games unit Moonton to Savvy Games Group for $6 billion, unloading a gaming studio it acquired just a few years ago to focus on generative AI. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.5% as of 6:55 a.m. New York time Nasdaq 100 futures fell 0.7% Futures on the Dow Jones Industrial Average fell 0.4% The Stoxx Europe 600 fell 0.3% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index rose 0.3% The euro fell 0.3% to $1.1558 The British pound fell 0.4% to $1.3376 The Japanese yen fell 0.6% to 158.73 per dollar Cryptocurrencies
Bitcoin rose 0.1% to $70,566.95 Ether was little changed at $2,147.65 Bonds
The yield on 10-year Treasuries advanced five basis points to 4.30% Germany’s 10-year yield advanced two basis points to 2.99% Britain’s 10-year yield advanced 10 basis points to 4.95% Commodities
West Texas Intermediate crude was little changed Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from James Hirai and Neil Campling.
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