Stocks Fall as US-Iran Jitters Spur Rally in Oil: Markets Wrap
(Bloomberg) — A flare-up in geopolitical risks sent stocks and bonds lower as oil jumped after President Donald Trump said a ceasefire with Iran may be over, adding the US would probably launch further strikes.
Almost 400 shares in the S&P 500 fell, but the index pared losses as Trump noted he doesn’t think the war will start again. Chipmakers climbed. The renewed hostilities in the Persian Gulf threatened a fresh wave of disruption for energy trading, with Brent crude briefly topping $80. That has reignited inflation worries, prompting money markets to boost their bets the Federal Reserve will lift interest rates by October. Bitcoin sank.
“We hit them very hard last night,” Trump said Wednesday on the sidelines of the NATO summit in Ankara, Turkey. “Probably hit them hard again tonight.”
Trump spoke hours after the US launched strikes on Iran and revoked a waiver that allowed Tehran to sell its oil globally, measures that came in response to attacks on ships in the Strait of Hormuz. The president also noted that a blockade on Iranian ports could resume, raising concerns about a return to all-out war.
“Markets weren’t initially taking the re-escalation in US-Iran tensions too seriously earlier this week,” said Fawad Razaqzada at Forex.com. “But today, that seems to have changed.”
While renewed geopolitical risks may fuel some near-term risk-off sentiment, neither the US nor Iran appears inclined toward a prolonged conflict, according to Angelo Kourkafas at Edward Jones. He also noted that investors have already seen how reacting to fast-moving headlines can lead to suboptimal portfolio outcomes.
“It would likely take a much larger and sustained rise in oil prices to materially alter the outlook for the economy and corporate earnings,” he added.
Veteran strategist Ed Yardeni said the rupture in the ceasefire between the US and Iran risks sparking a fresh acceleration in price growth, which in turn could compel the Fed to raise interest rates.
A few Fed officials in their most-recent policy meeting said there was a case for raising rates, though they ultimately supported the decision to leave rates on hold. More generally, minutes of their June gathering reflected growing concern over inflation just as worries over the labor market slightly receded.
“One thing is certain: future policy is heavily contingent on the political situation in the Middle East,” said Jeffrey Roach at LPL Financial. “If we can tease out any forward guidance from the minutes, it would be the committee is working through a wide range of scenarios and will not commit to a specific scenario until the incoming data provides necessary clarity.”
Corporate Highlights:
SpaceXAI has unveiled a new artificial-intelligence model built in partnership with AI coding startup Cursor that’s meant to be more adept at finance, legal and coding tasks, in a bid by Elon Musk’s firm to gain ground on rivals like Anthropic PBC and OpenAI. China plans to allow top AI companies to buy a limited amount of H200 chips from Nvidia Corp., a sign the country is easing restrictions on the coveted US technology, according to the Information. Apple Inc., following through on a pledge to boost spending on US-made components, said its expanded agreement with Broadcom Inc. is expected to top $30 billion. Meta Platforms Inc. will invest around $10 billion to build its first data center in Canada as the company expands its infrastructure to support its AI ambitions. Jeff Bezos’ Blue Origin LLC is embarking on its first external fundraising round, according to people familiar with the matter, seizing on the enthusiasm ginned up by archrival SpaceX’s record initial public offering. What Bloomberg Strategists say…
“Rising volatility in oil due to renewed US-Iran tensions will be a bigger headwind to risk sentiment than prices in the $70s.”
—Michael Ball, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.3% as of 4 p.m. New York time The Nasdaq 100 rose 0.3% The Dow Jones Industrial Average fell 1.1% The MSCI World Index fell 0.6% Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.1% to $1.1427 The British pound rose 0.3% to $1.3403 The Japanese yen fell 0.2% to 162.49 per dollar Cryptocurrencies
Bitcoin fell 2.2% to $62,252.8 Ether fell 2.5% to $1,739.05 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.57% Germany’s 10-year yield advanced 10 basis points to 3.09% Britain’s 10-year yield advanced 13 basis points to 4.97% Commodities
West Texas Intermediate crude rose 5.4% to $74.25 a barrel Spot gold fell 0.6% to $4,081.35 an ounce ©2026 Bloomberg L.P.
