Stocks and bonds sink as oil surge rattles traders

Stocks fell and bonds deepened losses as the war in Iran, heightened fears of a lengthy disruption to energy markets. Read more.

You can save this article by registering for free here. Or sign-in if you have an account. Stocks fell and bonds deepened losses as the war in Iran entered its fourth day with no sign of de-escalation, heightening fears of a lengthy disruption to energy markets and a surge in inflation.  S&P 500 futures tumbled 1.7 per cent. European and Asian equity benchmarks headed for their worst two-day drop since April.

 Brent crude rose more than eight per cent to top US$85 a barrel for the first time since July 2024. European gas added 41 per cent to Monday’s gains as the world’s largest LNG export plant in Qatar remained shut. Concern that energy prices could remain elevated pushed global yields higher for a second day. European debt was among the hardest hit, given the region’s greater exposure to higher oil and gas costs, with traders sharply dialing down expectations for interest-rate cuts.

By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The yield on two-year U.K. gilts surged 17 basis points. A surprise acceleration in euro-area inflation added to bets that the European Central Bank could raise rates in 2026. Ten-year Treasury yields climbed six basis points to 4.10 per cent as expectations dimmed for a second United States Federal Reserve cut in 2026.

The dollar remained the haven of choice, rising 0.7 per cent. As the U.S.-Israeli war on Iran reverberated across the Middle East, U.S. President Donald Trump insisted there was no fixed timeline, while Secretary of State Marco Rubio said “the hardest hits are yet to come.” The U.S. embassy in Riyadh was attacked by drones, while Israel sent soldiers into southern Lebanon, where the Iran-aligned Hezbollah militia is based.

“There was definitely a degree of complacency in U.S. equity market valuations at close yesterday, and a perception that military conflict in Iran was a self-contained geopolitical risk,” said Emma Moriarty, portfolio manager at CG Asset Management. “Comments from the White House yesterday suggest a will to make the conflict more durable and to do whatever it takes.” A key focus for traders is what happens in the Strait of Hormuz, a narrow waterway off the coast of Iran that carries about a fifth of global oil supply.

“The critical difference is that it has become clear that crucial energy infrastructure has been shut down, which means that oil and gas supply will be impaired for four to six weeks,” said Joachim Klement, head of strategy at Panmure Liberum. “We continue to think that this war will last weeks, but not months.” One of the day’s most pronounced moves came in South Korea, which slumped 7.2 per cent as markets reopened after a holiday.

Samsung Electronics Co. and SK Hynix Inc. dropped more than 10 per cent. Nvidia Corp. fell three per cent in U.S. premarket trading as officials consider capping the number of artificial-intelligence accelerators the company can export to any single Chinese customer. In Europe, banks and insurers are now in negative territory for the year as rising bond yields weigh on valuations. UniCredit SpA and Deutsche Bank AG slumped more than five per cent.

“We do not agree with the sanguine market reaction yesterday and see downside in risky assets over the coming days,” wrote Mohit Kumar, chief strategist for Europe at Jefferies. “We are happy to  be overweight cash right now, waiting for more clarity and then use market moves to buy the dip.” Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful.

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This report covers the latest developments in samsung. The information presented highlights key changes and updates that are relevant to those following this topic.

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