Oil Jumps on Trump’s War Threat, Stock Rally Fades: Markets Wrap
(Bloomberg) — Oil jumped, while stocks and bonds fell after President Donald Trump warned the US would hit Iran “extremely hard” over the next two to three weeks, undermining expectations for an imminent resolution to the five-week-old Middle East conflict.
Brent crude jumped as much as 6.9% to above $108 a barrel as the war kept the Strait of Hormuz — a key artery for Middle East shipments — effectively shut, tightening supply. The passage would reopen “naturally” once hostilities subside, the US president said, without providing details or a clear timeline.
Stocks sold off after Trump’s speech undermined a nascent global rally, as concerns grew that a prolonged war would keep crude prices elevated and weigh on economic growth. A gauge of Asian shares fell 2.2% and futures contracts for the S&P 500 Index dropped 1.3%, signaling the two-day advance in global equities on expectations of easing tensions is unlikely to hold. European shares were primed to open about 2% lower.
Cross-asset volatility also picked up after Trump’s speech, with the dollar strengthening — reinforcing its appeal as the haven of choice during the war — and Treasuries falling on inflation concerns.
“Trump’s speech was not what the market had hoped for — namely, signals pointing toward an end to the conflict,” said Jumpei Tanaka, head of investment strategy at Pictet Asset Management Japan Ltd. “Instead, he suggested a potential escalation. The remarks are being interpreted as a negative factor for the equity market.”
Optimism had been building in the run-up to Trump’s speech after the president had earlier said he foresaw the US ending the war with Iran within two to three weeks. The change of tone in Trump’s speech damped hopes for a quick conclusion of the conflict that has already roiled financial markets and pushed several equity gauges into correction territory as investors pared risk.
In the near 20-minute speech, Trump didn’t outline any shift in Iran policy, nor did he provide specifics on how operations would proceed beyond what he has said before.
Trump said the core strategic objectives are nearing completion, in his speech from the White House. The president nevertheless suggested that military operations may soon escalate, saying “over the next two to three weeks, we’re going to bring them back to the stone ages where they belong.”
“The market was craving some clarity on when the conflict will finish, but this speech has just added more uncertainty,” said Nick Twidale, chief market analyst at AT Global Markets. “Investors are clearly unimpressed and I think we could see more downside for global markets today.”
What Bloomberg’s Strategists Say…
“Risk rallies will remain volatile in the short term and vulnerable to sustained reversals in the longer term because of the likelihood that even the best-case scenario for the conflict will create sustained, deep damage to global supply chains. This week’s back-and-forth looks to be entrenching the likelihood that shipping through Hormuz will remain well short of pre-war levels for a substantial period.”
—Garfield Reynolds, MLIV Asia Team Leader. Click here for the full analysis.
In other corners of the market, Bitcoin tumbled with the original cryptocoin falling 2.6% to trade around $66,400. Precious metals were sold off with gold sliding 2% to about $4,660 an ounce and silver tumbling 4.4%.
Treasuries fell across the curve with the yield on the benchmark 10-year yield rising six basis points to 4.37%
The Indian rupee strengthened and the country’s bonds extended losses after the central bank stepped in to shore up the currency.
Meanwhile, Iran’s president took the unusual step of issuing a letter addressed to Americans, arguing that his country has no enmity with the US and has acted in self-defense. He warned that “continuing along the path of confrontation is more costly and futile than ever before” and noted that attacks on infrastructure directly target the Iranian people.
Earlier, Trump said that Iran has asked for a ceasefire, adding that the US would only consider it if the Strait of Hormuz was reopened. Iran’s foreign ministry said the claim of a ceasefire request was “false and baseless,” according to state TV.
“While everyone wants to move on from this, there is still much to unpack from the past month’s events in the Middle East,” said Ken Wong, Asian equity portfolio specialist at Eastspring Investments Hong Kong Ltd. “The question now is how much these developments will ripple through the global economy over the coming quarters.”
Some of the main moves in markets:
Stocks
S&P 500 futures fell 1.3% as of 1:55 p.m. Tokyo time Nikkei 225 futures (OSE) fell 2.9% Japan’s Topix fell 1.6% Australia’s S&P/ASX 200 fell 1.1% Hong Kong’s Hang Seng fell 1.1% The Shanghai Composite fell 0.5% Euro Stoxx 50 futures fell 1.9% Currencies
The Bloomberg Dollar Spot Index rose 0.3% The euro fell 0.5% to $1.1534 The Japanese yen fell 0.4% to 159.38 per dollar The offshore yuan fell 0.2% to 6.8891 per dollar Cryptocurrencies
Bitcoin fell 2.8% to $66,276.32 Ether fell 4.7% to $2,043.31 Bonds
The yield on 10-year Treasuries advanced six basis points to 4.38% Japan’s 10-year yield advanced 8.5 basis points to 2.385% Australia’s 10-year yield advanced 12 basis points to 5.03% Commodities
West Texas Intermediate crude rose 4.9% to $105.07 a barrel Spot gold fell 1.9% to $4,666.22 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Momoka Yokoyama, Ruth Carson, Winnie Hsu, David Finnerty, Mark Cranfield, Aya Wagatsuma and Gabrielle Ng.
©2026 Bloomberg L.P.
