Stocks Fall as Oil Climbs on Mideast Escalation: Markets Wrap
(Bloomberg) — Stocks fell and bond yields climbed after a weekend of attacks and counterstrikes in the Middle East sent oil prices higher.
Technology stocks bore the brunt of the selling, with SK Hynix Inc. plunging by a record 15% in Seoul. Nasdaq 100 futures slid 1.2%, while those for the S&P 500 were 0.4% lower. Construction stocks led a 0.2% drop in Europe. An 8.9% retreat in South Korea’s Kospi index dragged Asian equities to a one-month low.
The US and Iran exchanged strikes into Monday while issuing conflicting claims over whether the Strait of Hormuz was open. The escalation sent Brent 3.8% higher to near $79 a barrel, fueling bets that a Federal Reserve interest rate hike was all but certain as soon as September. Ten-year Treasury yields rose one basis point to 4.58%. The dollar gained while gold and Bitcoin fell.
“The US-Iran deal remains very fragile, and supply flows from the Gulf will take a long time to normalize,” said Roberto Scholtes, head of strategy at Singular Bank. “That said, the market’s focus on the Middle East should fade relatively quickly, with corporate earnings and the Fed likely to return to the driver’s seat.”
In a busy week where a broad range of catalysts can set the direction for markets, Kevin Warsh is due to make his first appearance before Congress as Fed chairman for two days of testimony. The sessions will be preceded by June consumer price figures from the Bureau of Labor Statistics.
Tuesday will also see a slew of earnings reports from Wall Street’s biggest banks, followed by critical tech earnings from chipmaking equipment maker ASML Holding NV the following day in Europe.
“This week is going to be one of volatile sideways movements before the rally can accelerate again,” said Joachim Klement, head of strategy at Panmure Liberum. “We do remain cautious about the AI trade, though, as this is still very much overbought.”
What Bloomberg’s Strategists Say…
“Bonds are primed to decline with simmering Middle East tensions signaling persistent inflation pressures that will drive yields up at both ends of the curve.”
— Garfield Reynolds, MLIV Asia Team Leader. Click here for the full analysis.
Corporate News:
Taiwan Semiconductor Manufacturing Co. reported quarterly sales rose 36%, meeting high expectations and signaling global demand for AI hardware remains intact. Seven & i Holdings Co.’s move toward selling a stake to SoftBank Corp. and PayPay Corp. signals a willingness to surrender some control over its future in return for the benefits of being allied with key strategic partners. Nippon Paint Holdings Co. has made multiple offers for Akzo Nobel NV’s decorative paints business in the past month, according to people with knowledge of the matter. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.2% as of 8:30 a.m. London time S&P 500 futures fell 0.4% Nasdaq 100 futures fell 1.2% Futures on the Dow Jones Industrial Average fell 0.1% The MSCI Asia Pacific Index fell 1.9% The MSCI Emerging Markets Index fell 2.3% Currencies
The Bloomberg Dollar Spot Index rose 0.1% The euro was little changed at $1.1409 The Japanese yen fell 0.3% to 162.12 per dollar The offshore yuan was little changed at 6.7844 per dollar The British pound fell 0.1% to $1.3386 Cryptocurrencies
Bitcoin fell 1.9% to $62,920.09 Ether fell 1.9% to $1,786.16 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.58% Germany’s 10-year yield advanced two basis points to 3.09% Britain’s 10-year yield advanced four basis points to 4.92% Commodities
Brent crude rose 3.8% to $78.89 a barrel Spot gold fell 1.5% to $4,058.91 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Levin Stamm.
©2026 Bloomberg L.P.
