Oil Rises With Dollar After US Strikes on Iran: Markets Wrap

(Bloomberg) — Oil prices rose and the dollar advanced as investors assessed the implications of renewed geopolitical tensions for energy supplies and risk assets.

Brent climbed more than 2% to trade near $76 a barrel after the US launched fresh airstrikes in Iran and revoked a waiver that allowed it to sell oil globally following attacks on ships in the Strait of Hormuz. The Bloomberg Dollar Spot Index rose 0.1%, adding to gains from Tuesday. Gold hovered around $4,100 an ounce.

The broader equity-market reaction was relatively muted, with MSCI Inc.’s gauge of Asian stocks down 0.2%. S&P 500 futures were steady, while contracts for the Nasdaq 100 rose 0.3%. That’s after US benchmarks fell on Tuesday, with a gauge of chip stocks dropping more than 4%. The Nasdaq 100 slid 1.8%.

The latest escalation in geopolitical tensions risks triggering renewed disruption in energy markets and undermining the interim US-Iran peace deal reached last month. For equity markets, it adds another layer of uncertainty as investors have already been grappling with sharp volatility in recent weeks amid concern the artificial intelligence-fueled rally has run too far, too fast.

“After AI and tech sentiment had dominated market moves over the last couple of weeks, investors are now forced to move back to focusing on geopolitical tensions,” said Nick Twidale, chief market analyst at AT Global Markets. “And this should dominate market sentiment, especially if we see a further escalation in the coming sessions.”

A handful of vessels appeared to transit through the Strait of Hormuz in the early hours of Wednesday, even after a spate of strikes on tankers left shipowners struggling to assess the risk of operating in the vital waterway.

Brent oil prices had touched a peak near $125 a barrel in late April, two months after the US and Israel began the military campaign against Iran. Prices returned toward pre-conflict levels on growing signs of a recovery in supplies after the peace deal.

American forces concentrated on Iranian air defenses and weapons launchers in the attacks, according to a US official. Iran’s Mehr News Agency reported explosions were heard near the strait.

Elsewhere in markets, Treasuries were steady while yields on Australian and Japanese 10-year bonds climbed. Bitcoin fell about 1%.

“At the margin, the spike in oil prices and the removal of the Iranian oil waiver strengthens the case for central banks to deliver precautionary rate hikes due to the ongoing risk of second round inflation taking hold,” said Sean Keane, chief strategist for Asia Pacific at JB Drax Honore.

Corporate Highlights:

SK Hynix Inc.’s $28 billion US listing is multiple times oversubscribed ahead of pricing on Thursday, according to people familiar with the matter. When Amazon.com Inc. sold its biggest ever bond earlier this year, it was inundated with investor orders amid hype about the AI boom. This time around, there’s less fanfare. Peak demand for its latest $25 billion offering reached $62 billion, according to people with knowledge of the matter. That’s about half the orders it attracted for its prior $37 billion deal in March. Meta Platforms Inc. debuted a new image-generation AI model, its first such release since the company spent billions to rebuild its AI lab under Chief AI Officer Alexandr Wang a year ago. Microsoft Corp., looking to reduce artificial-intelligence costs, is starting to replace OpenAI and Anthropic with its own models in software products like Excel and Outlook. China’s DeepSeek is developing its own chip to help power AI systems, Reuters reported, citing unnamed sources. Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 10:39 a.m. Tokyo time Japan’s Topix fell 0.7% Australia’s S&P/ASX 200 fell 1.2% Hong Kong’s Hang Seng rose 1.5% The Shanghai Composite rose 0.1% Euro Stoxx 50 futures were little changed Currencies

The Bloomberg Dollar Spot Index rose 0.1% The euro was little changed at $1.1401 The Japanese yen fell 0.2% to 162.40 per dollar The offshore yuan was little changed at 6.8055 per dollar Cryptocurrencies

Bitcoin fell 1.2% to $62,899.4 Ether fell 1.9% to $1,749.56 Bonds

The yield on 10-year Treasuries was little changed at 4.55% Japan’s 10-year yield advanced 1.5 basis points to 2.860% Australia’s 10-year yield advanced six basis points to 4.88% Commodities

West Texas Intermediate crude rose 2.3% to $72.03 a barrel Spot gold fell 0.2% to $4,098.38 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu, Ruth Carson, Stephen Kirkland and Chris Bourke.

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