Global markets face volatility amid rising inflation fears and pressure from bond yields.
Oil prices surged on Thursday following reports that the United States was considering fresh military strikes against Iran ahead of next month’s midterm elections, raising concerns about further disruptions to global oil supplies.
However, the rally moderated after US President Donald Trump dismissed the possibility of attacking Iran before the November elections, stating that Washington was engaged in “productive discussions” with Tehran.
Brent North Sea crude, the global oil benchmark, climbed to a high of $105.88 per barrel before easing to $103.65, representing an increase of more than 58% over the past year.
Meanwhile, West Texas Intermediate (WTI), the primary US oil benchmark for November delivery, rose to $93.20 per barrel before settling at $91.49, marking a daily gain of 3.64%.
According to a report by The Atlantic, the White House had instructed the Pentagon to prepare potential military strike options targeting Iranian facilities ahead of the November 3 midterm elections.
With Trump’s Republican Party facing the possibility of losing control of both chambers of Congress, any escalation in tensions between Washington and Tehran could intensify political and economic challenges for the president.
The situation is further complicated by record-high diesel prices, which are already placing significant financial pressure on American consumers.
Following the sharp increase in energy prices, US President Donald Trump stated on his Truth Social platform on Thursday that the United States would not carry out military strikes against Iran before the midterm elections.
However, oil markets remain unsettled by more than just uncertainty surrounding Trump’s military strategy. Andy Lipow of Lipow Oil Associates attributed the volatility partly to intensified Iranian attacks on vessels passing through the strategically important Strait of Hormuz.
Lipow also highlighted the potential impact of Hurricane Isaias, which could disrupt substantial oil production operations in the Gulf of Mexico.
Rising Bond Yields Add to Market Pressure
Meanwhile, Yemen’s Houthi rebels reportedly targeted Riyadh airport with missiles and urged workers at Saudi Arabian oil facilities to evacuate, warning of possible attacks as regional tensions intensified.
According to Fawad Razaqzada, an analyst at Forex.com, the renewed increase in crude oil prices is heightening inflation fears and pushing government bond yields higher.
Government bond yields have recently climbed to levels not witnessed in more than two decades. Investors are increasingly concerned that persistent inflation could prompt central banks to raise interest rates, potentially weakening economic growth and reducing stock market valuations.
Rising oil prices also affected global equity markets, with major Wall Street indexes ending the trading session mostly lower.
European stock markets, including London’s benchmark index, closed in negative territory, although energy companies benefited from stronger crude oil prices.
Major Asian markets also experienced declines, following losses on Wall Street the previous day as technology stocks retreated from their recent gains.
Shares of South Korean technology giant Samsung fell after the company projected a substantial increase in quarterly earnings that nevertheless failed to meet analysts’ expectations.
In the United States, SpaceX shares reportedly dropped 4.2% following a Financial Times report suggesting that Elon Musk’s company was seeking approximately $40 billion through bank loans and debt financing to support additional purchases of Nvidia artificial intelligence chips.
Investor sentiment was further affected by another Financial Times report indicating that OpenAI’s annualized revenue was approximately $20 billion below the figures investors had previously been led to expect.
Adam Sarhan of 50 Park Investments suggested that the reported revenue shortfall could raise broader concerns about the financial performance and growth expectations of other companies operating in the artificial intelligence industry.
Key Market Figures at Approximately 20:30 GMT
- Brent North Sea Crude: Increased 4.1% to $104.28 per barrel.
- West Texas Intermediate (WTI): Rose 3.6% to $91.49 per barrel.
Global Stock Market Performance
- New York – Dow Jones: Gained 0.1% to close at 51,231.64 points.
- New York – S&P 500: Declined 0.5% to finish at 7,765.36 points.
- New York – Nasdaq Composite: Dropped 1.3% to settle at 27,193.34 points.
- London – FTSE 100: Slipped 0.2% to close at 10,441.60 points.
- Paris – CAC 40: Fell 0.5% to end at 7,729.69 points.
- Frankfurt – DAX: Lost 1.2% to finish at 24,806.97 points.
- Tokyo – Nikkei 225: Declined 1.4% to close at 69,042.11 points.
- Hong Kong – Hang Seng Index: Dropped 1.4% to settle at 23,785.79 points.
- Shanghai Composite: Decreased 0.8% to finish at 3,811.90 points.
Foreign Exchange Market Updates
- EUR/USD: The euro strengthened against the US dollar, rising to $1.1213 from Wednesday’s $1.1194.
- GBP/USD: The British pound advanced against the US dollar, climbing to $1.3228 from $1.3210.
- USD/JPY: The US dollar weakened against the Japanese yen, slipping to ¥157.92 from ¥158.07.
- EUR/GBP: The euro edged higher against the British pound, increasing to 84.77 pence from 84.74 pence
