Bonds and Stocks Sell Off as Oil Rally Extends: Markets Wrap
(Bloomberg) — Another surge in oil spurred by the escalating Iran war sent global stocks, bonds and metals lower, with concern intensifying that central banks will be forced to tighten policy to keep inflation in check.
Short-dated bonds led losses on concern European central banks will be forced to hike and the Federal Reserve will remain on hold this year. The yield on two-year Treasuries climbed as much as 18 basis points to 3.95% before paring the move. The rout was deeper across the Atlantic, with Britain’s similar maturity yields increasing 26 basis points to 4.36%.
The S&P 500 headed toward its lowest since November while a gauge of European shares slipped 2.3%. Brent topped $111 and natural gas jumped as strikes in the Persian Gulf threatened long-term damage to major energy facilities. Gold declined for a seventh straight session. Silver sank 7%. Aluminum slid the most since 2018.
The Bank of England noted it “stands ready to act” against a surge in inflation triggered by the war in the Middle East. The European Central Bank said it’s well placed to deal with growing dangers from the war after holding rates. The Bank of Japan kept the possibility of an April hike on the table after leaving policy unchanged.
That all followed Fed Chair Jerome Powell’s signals this week that officials won’t cut rates until inflation resumes cooling. BNP Paribas strategists say the Fed may even raise the possibility of hiking if energy prices remain high and unemployment stays stable.
Iran maintained attacks on energy assets around the Middle East even after US President Donald Trump called for restraint. Defense Secretary Pete Hegseth pushed back against criticism the US war on Iran risked becoming a military “quagmire.”
Complacent investors who assume there will be a swift resolution to the Iran war are making a high-risk bet given how bad surging oil prices typically end up being for stocks, according to JPMorgan Chase & Co.’s Dubravko Lakos-Bujas.
Treasury Secretary Scott Bessent said the US is looking to remove sanctions that it has long imposed on Iranian oil in an effort to lower surging energy prices triggered by its war in the Gulf, and could also look at a unilateral release of its own reserves.
Corporate Highlights:
FedEx Corp. opened 2026 on a tear, as the stock raced ahead on rosy views of the US economy. But with the war in Iran threatening to crimp growth, the delivery giant’s earnings report after the bell on Thursday represents a test of Wall Street’s faith in economic resilience. Micron Technology Inc. warned that it will need to spend heavily on production to meet burgeoning demand, overshadowing a generally upbeat forecast from the largest US maker of computer memory chips. Alibaba Group Holding Ltd. aims to quintuple cloud and AI revenue to $100 billion annually in five years, setting a high bar for its artificial intelligence endeavors to offset the plateauing of a once pre-eminent e-commerce empire. One of Eli Lilly & Co.’s most highly anticipated experimental medicines helped diabetic patients lose more weight than any drug currently on the market, underscoring its potential in the increasingly crowded race for next-generation therapies. Uber Technologies Inc. plans to invest as much as $1.25 billion in carmaker Rivian Automotive Inc. to help launch a robotaxi fleet that will be available in the US, Canada and Europe over the next five years. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.6% as of 11:01 a.m. New York time The Nasdaq 100 fell 0.6% The Dow Jones Industrial Average fell 0.7% The Stoxx Europe 600 fell 2.3% The MSCI World Index fell 1% Currencies
The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.6% to $1.1516 The British pound rose 0.8% to $1.3366 The Japanese yen rose 0.9% to 158.36 per dollar Cryptocurrencies
Bitcoin fell 2.4% to $69,499.85 Ether fell 3% to $2,121.83 Bonds
The yield on 10-year Treasuries was little changed at 4.27% Germany’s 10-year yield advanced two basis points to 2.96% Britain’s 10-year yield advanced 10 basis points to 4.84% Commodities
West Texas Intermediate crude rose 1.1% to $97.37 a barrel Spot gold fell 4.4% to $4,606.28 an ounce ©2026 Bloomberg L.P.
