Equities Slip Back Into Losses as Oil Advances: Markets Wrap
(Bloomberg) — Equities gave up gains while Brent crude resumed its climb as the war in the Middle East inflicted growing disruptions to energy markets. The dollar advanced.
S&P 500 futures fell 0.3%. Europe’s Stoxx 600 retreated 0.2%. A benchmark for Asian equities trimmed an earlier jump of as much as 3.8%. Brent rose toward $84 a barrel after Iran vowed to escalate its retaliation against US strikes. The dollar climbed 0.3%, strengthening against all major currencies.
Developments in the US-Israeli war are once again driving traders to curb risk after sentiment picked up in the previous session. As the conflict drags, stress in energy markets is coming to the fore, with China seeking to conserve fuel and Japanese refiners calling for the release of strategic petroleum reserves.
“The key issue is transit through the Strait of Hormuz. If it is blocked for more than a week, the risk of sustained high energy prices would become real,” said Roberto Scholtes, head of strategy at Singular Bank. “If it is resolved quickly, the economic and financial impact would likely be negligible.”
A global bond selloff showed no respite, with the 10-year Treasury yield rising for a fourth straight day, up three basis points to 4.13%. The rout was steeper in Europe, where 10-year yields rose five basis points or more in the UK, France, Italy and Spain.
Gold rose slightly above $5,150 an ounce. Bitcoin hovered near $72,400.
What Bloomberg strategists say…
“The fate of European equities is largely tied to developments in the energy complex, and prices are more inclined to rise than fall at this stage. In this environment, any bounces will struggle to stick. In the rates space, the impact of higher energy prices is continuing to be felt, with yields higher across European curves.”
— Adam Linton, macro strategist. For full analysis, click here.
Corporate Highlights:
The financial and logistical troubles the Iran war is causing for the global aviation industry are compounding by the day, with the number of canceled flights to Middle East hubs surpassing 23,000 since fighting began. Broadcom Inc. Chief Executive Officer Hock Tan said the company expects its AI chip sales to top $100 billion next year. Investors are boosting short positions in Blue Owl Capital Inc., betting the stock has more room to fall despite wiping out nearly one-third of its value this year. Anthropic PBC chief Dario Amodei has resumed discussions with the Pentagon about the way its AI models are used by the US military. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.2% as of 8:57 a.m. London time S&P 500 futures fell 0.3% Nasdaq 100 futures fell 0.3% Futures on the Dow Jones Industrial Average fell 0.5% The MSCI Asia Pacific Index rose 2.2% The MSCI Emerging Markets Index rose 2.3% Currencies
The Bloomberg Dollar Spot Index rose 0.3% The euro fell 0.3% to $1.1599 The Japanese yen fell 0.2% to 157.32 per dollar The offshore yuan was little changed at 6.8993 per dollar The British pound fell 0.4% to $1.3325 Cryptocurrencies
Bitcoin fell 1.4% to $72,333.45 Ether fell 1.6% to $2,116.31 Bonds
The yield on 10-year Treasuries advanced three basis points to 4.12% Germany’s 10-year yield advanced five basis points to 2.80% Britain’s 10-year yield advanced six basis points to 4.50% Commodities
Brent crude rose 2.9% to $83.79 a barrel Spot gold rose 0.5% to $5,166.12 an ounce This story was produced with the assistance of Bloomberg Automation.
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