Stocks Fall, Oil Rises on Mideast Tension Flare-Up: Markets Wrap
(Bloomberg) — A rally in oil drove stocks and bonds lower on concerns that a resumption of Iranian attacks could escalate Middle East tensions, keeping energy costs elevated while fueling inflation risks.
Equities dropped from all-time highs as Brent crude jumped to around $115 after Iran attacked the United Arab Emirates for the first time in almost a month while Tehran warned it was tightening its grip on the Strait of Hormuz. With oil prices not far from a four-year peak, Treasury yields climbed.
The UAE said it intercepted Iranian cruise missiles fired at different parts of the country, fracturing an uneasy calmness since a ceasefire between Tehran and Washington took hold. An oil terminal part owned by Vitol Group was attacked in the port city of Fujairah, according to people familiar with the matter.
The wave of strikes came after a plan announced by President Donald Trump to help vessels through the Strait of Hormuz, with Tehran warning it would attack US forces if they came near the waterway. Iran will be “blown off the face of the earth” if they strike American ships guiding vessels through the strait, Trump told Fox News.
A vital trade thoroughfare, Hormuz has become a focal point in the current conflict, as Iran exerts its ability to impose asymmetric economic pain and the US struggles to reestablish free transits. The strait has been virtually blocked since US and Israel began strikes on Iran in late February.
“Even if the immediate conflict de-escalates, we expect the aftershocks will remain with us for some time,” said Darrell Cronk at Wells Fargo Investment Institute. “The effects — on energy prices, industrial activity, and geopolitical risk premia — are unlikely to fade quickly.”
“A diplomatic solution to this conflict remains the most likely outcome,” said James McCann at Edward Jones. “However, the risk of a more prolonged or larger disruption to global energy markets remains important to monitor, in our view, especially with markets having rallied sharply in recent weeks.”
Judging by last week, the market’s recipe for near-term upside will be sidestepping negative surprises out of the Middle East to allow what has been a stronger-than-average earnings season to continue to dominate sentiment, noted Chris Larkin at E*Trade from Morgan Stanley.
Earnings revisions for the S&P 500 have moved higher across multiple time horizons over the past month, according to Michael Wilson at Morgan Stanley. Second-quarter estimates are up 2% and forecasts for calendar 2026 and the next 12 months have risen 3% and 4%, respectively.
“Unless we experience a meaningful external shock, it will be hard to derail momentum and hand control back to the bears,” said Mark Hackett at Nationwide. “That is what is giving this rally a more durable and credible foundation than what we saw just a few weeks ago.”
Corporate Highlights:
US transportation stocks slipped after Amazon.com Inc. announced expanded logistics offerings that will turn it into a major competitor for parcel carriers and air freight companies, and also impact truckers and third-party brokers. GameStop Corp. is trying to buy eBay Inc. for about $56 billion in cash and stock, a bold attempt by Ryan Cohen to take over a storied e-commerce name several times larger. A startup backed by General Catalyst Partners agreed to acquire Global Business Travel Group Inc., the travel platform spun out of American Express Co., in a deal worth about $6.3 billion. Berkshire Hathaway Inc.’s cash pile soared to its highest level ever and operating earnings jumped in Greg Abel’s first quarter as chief executive officer. Tyson Foods Inc. raised its full-year profit outlook as strong protein demand enables growth even as the struggling beef segment shows no signs of turning around. What Bloomberg strategists say…
“The 10-year yield is nearing a sensitive area that’s proved hard to digest in recent years. If stocks are more immune to oil prices than bonds, the question is how long they can stay as resistant to higher yields.”
—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.5% as of 1:07 p.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average fell 1.1% The MSCI World Index fell 0.7% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1686 The British pound fell 0.4% to $1.3528 The Japanese yen fell 0.2% to 157.25 per dollar Cryptocurrencies
Bitcoin rose 1.7% to $80,210.95 Ether rose 1.4% to $2,361.07 Bonds
The yield on 10-year Treasuries advanced eight basis points to 4.45% Germany’s 10-year yield advanced five basis points to 3.09% Britain’s 10-year yield was little changed at 4.96% Commodities
West Texas Intermediate crude rose 3.6% to $105.61 a barrel Spot gold fell 2% to $4,520.73 an ounce ©2026 Bloomberg L.P.
