Markets took a hit yesterday as hostilities in the Middle East continued to escalate, with the US reinstating its blockade of Iranian shipping in the Strait of Hormuz. All three major US indices closed lower, with the tech sector again the most volatile. Oil prices surged over 9%, Treasury yields rose on inflation concerns, the dollar gained against the majors, and gold fell back to key support levels on the stronger greenback.
📊 Equities
Markets took a hit in trading yesterday as hostilities in the Middle East continued to escalate, with the US now advising that it has reinstated its blockade of Iranian shipping in the Strait of Hormuz. All three major US indices closed lower, with the tech sector again the most volatile. The Dow fell 0.26% to 52,498, the S&P 500 lost 0.79% to 7,515, and the Nasdaq dropped 1.55% to 25,873.
🛢️ Oil
Oil prices leapt higher on the news as the market once again priced in supply disruption risks, with both major contracts finishing the day over 9% higher. Brent crude surged 9.59% to US$83.30 per barrel, while WTI crude jumped 9.42% to US$78.14.
🥇 Gold
Gold dropped back to key support levels on the stronger greenback, declining 2.90% to US$4,000.65 per ounce.
💵 FX & Bonds
US Treasury yields drove higher as inflationary concerns increased, despite an expected dip in CPI data due later today. The 2-year yield rose 7.4 basis points to 4.282% and the 10-year yield climbed 6.3 basis points to 4.624%. The US dollar gained ground against the majors, with the Dollar Index rising 0.31% to 101.27.
| Market | Change | Close |
|---|---|---|
| Dow Jones | -0.26% | 52,498 |
| S&P 500 | -0.79% | 7,515 |
| Nasdaq | -1.55% | 25,873 |
| USD Index | +0.31% | 101.27 |
| US Treasury 2Y | +7.4 bps | 4.282% |
| US Treasury 10Y | +6.3 bps | 4.624% |
| Oil – Brent | +9.59% | $83.30 |
| Oil – WTI | +9.42% | $78.14 |
| Gold | -2.90% | $4,000.65 |
📌 Today’s Focus
The macroeconomic calendar kicks into action today with the major focus on US inflation data. However, traders are expecting any impact to be minimal, with the situation in the Gulf continuing to dictate sentiment.
🔹 UK – Bank of England Governor Andrew Bailey Speaks
🔹 US – CPI Data
🔹 US – FOMC Chairman Kevin Warsh Speaks