Global markets adopted a more cautious tone overnight as geopolitical tensions in the Middle East escalated sharply. Three tankers were reportedly struck in the Strait of Hormuz, the US announced it would revoke a licence authorising Iranian oil sales, and further reports of US strikes against Iranian targets added to concerns that the conflict could broaden. Oil surged over 5%, US equities fell, Treasury yields jumped to four-week highs and gold declined on a stronger dollar.
📊 Equities
US equity markets finished lower, with technology stocks leading the decline as investors continued to question elevated AI-related valuations. The Dow Jones fell 0.25% to 52,925, the S&P 500 lost 0.45% to close at 7,503, while the Nasdaq underperformed, declining 1.16% to finish at 25,818.
🛢️ Oil
Commodity markets were dominated by energy. Three tankers were reportedly struck by Iran in the Strait of Hormuz, while the United States announced it would revoke a licence authorising the sale of Iranian oil. Further reports of US strikes against Iranian targets added to concerns that the conflict could broaden. Brent crude jumped 5.40% to US$75.88 per barrel and WTI crude rose 5.28% to US$72.17.
🥇 Gold
Gold was unable to benefit from the geopolitical uncertainty, falling 1.40% to US$4,105.59 per ounce as the stronger US dollar weighed on precious metals.
💵 FX & Bonds
Safe-haven demand and inflation concerns pushed US Treasury yields sharply higher, with the benchmark 10-year yield rising 8.2 basis points to 4.551%, its highest level in four weeks. The 2-year Treasury yield also climbed 7.5 basis points to 4.185%. The stronger yield environment helped lift the US Dollar Index 0.23% to 101.09.
| Market | Change | Close |
|---|---|---|
| Dow Jones | -0.25% | 52,925 |
| S&P 500 | -0.45% | 7,503 |
| Nasdaq | -1.16% | 25,818 |
| USD Index | +0.23% | 101.09 |
| US Treasury 2Y | +7.5 bps | 4.185% |
| US Treasury 10Y | +8.2 bps | 4.551% |
| Oil – Brent | +5.40% | $75.88 |
| Oil – WTI | +5.28% | $72.17 |
| Gold | -1.40% | $4,105.59 |
📌 Today’s Focus
Attention now turns to today’s Reserve Bank of New Zealand interest rate decision, which remains a genuine live event for markets, before investors shift their focus to the release of the FOMC Meeting Minutes during the US session. Nevertheless, developments from the Middle East are likely to remain the primary driver of market sentiment throughout the day.
🔹 New Zealand – Reserve Bank of New Zealand Interest Rate Decision
🔹 New Zealand – Reserve Bank of New Zealand Press Conference
🔹 Switzerland – SNB Chairman Martin Schlegel Speaks
🔹 US – FOMC Meeting Minutes