Stocks Pare War-Fueled Losses as Oil Surge Wanes: Markets Wrap
(Bloomberg) — The war in the Middle East sparked fresh volatility in global markets, with stocks paring losses as a surge in energy prices faded after oil topped $100. A slide in bonds waned. Bitcoin jumped.
While the S&P 500 trimmed most of a 1.5% drop, it was set for the lowest since November. Chipmakers climbed. Economically sensitive firms like small caps were among the hardest hit as higher oil costs prompted investors to price faster inflation and risks to growth. US crude traded near $95 as the largest economies consider a coordinated release of emergency stockpiles.
“We expect markets to stay very short-term focused, volatile and headline-driven as the conflict plays out this week,” said Carol Schleif at BMO Private Wealth.
Markets have been rocked as the war showed no signs of easing, with a standstill of tanker traffic through the vital Strait of Hormuz choking off supplies to the rest of the world. Saudi Arabia started reducing oil production, even as the kingdom rushes to boosts exports through an alternative route.
Group of Seven finance ministers said they were ready to take any steps needed to support energy supply, including releasing strategic oil reserves — although the group isn’t at the point of doing so yet.
President Donald Trump is expected to review a set of options to tame oil prices, including restricting US exports and waiving some federal taxes, Reuters reported.
“I have a plan for everything,” Trump told the New York Post.
The S&P 500 fell 0.4%. The yield on 10-year Treasuries was little changed at 4.13%. Bitcoin topped $68,000, with some advocates once again touting it as a potential inflation hedge.
“We see a now-familiar pattern re-emerging,” said Steve Sosnick at Interactive Brokers. “US index futures sell off sharply overnight, recover somewhat as domestic traders rub the sleep from their eyes to find the ‘buy’ buttons on their screens, then after a bit of nervousness around the open, ever-hopeful dip buyers step in.”
Sosnick notes the “push/pull” between the real-world issues causing higher oil prices, inflation and growth fears versus the undercurrent of FOMO (fear of missing out) that keeps an underlying bid in stocks and keeps the losses from being catastrophic.
“FOMO is labeled as fear, but it’s really greed, and I would assert that there is still plenty of greed out there relative to fear,” he said.
Still, US stocks are facing a growing risk of a sharp selloff this year, according to Ed Yardeni, who updated his outlook for what he describes as “fast-moving times.”
The founder of Yardeni Research raised the probability of a meltdown to 35% for the rest of the year, up from 20%. He also slashed the odds of a meltup — a rally driven more by investor enthusiasm than underlying fundamentals — to just 5% from 20%.
Traders are unprepared for a correction in the S&P 500 that could see the gauge falling as much as 10% from its peak as a result of the war, according to JPMorgan Chase & Co.’s Andrew Tyler, who turned “tactically bearish.”
“Although volatility may feel uncomfortable, could rise from here, and possibly cause a near-term drawdown in stocks, volatility in itself tends to be brief when it reaches more extreme levels,” said Anthony Saglimbene at Ameriprise. “And, more often than not, the extreme volatility provides investors with a solid long-term entry point to buy stocks rather than sell.”
Corporate Highlights:
Apple Inc.’s artificial intelligence struggles are rippling through its product plans, forcing the company to delay a long-in-the-works smart home display until later this year, according to people with knowledge of the matter. Anthropic PBC sued the Defense Department for declaring that the AI giant posed a risk to the US supply chain, further ramping up a dispute with the Pentagon over safeguards on the company’s technology. Novo Nordisk A/S and Hims & Hers Health Inc. will work together to sell obesity drugs, a sudden reversal after more than eight months of acrimony that culminated in a legal battle. Live Nation Entertainment Inc. reached a settlement with federal antitrust authorities, the Justice Department said, throwing a wrench mid-trial into an antitrust case that accused the company of illegally monopolizing the live music industry and sought to force a sale of its Ticketmaster subsidiary. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.4% as of 3:07 p.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average fell 0.7% Currencies
The Bloomberg Dollar Spot Index rose 0.1% The euro fell 0.3% to $1.1581 The British pound fell 0.2% to $1.3391 The Japanese yen fell 0.4% to 158.36 per dollar Cryptocurrencies
Bitcoin rose 1.9% to $68,495.62 Ether rose 2.8% to $2,014.31 Bonds
The yield on 10-year Treasuries was little changed at 4.13% Germany’s 10-year yield was little changed at 2.86% Britain’s 10-year yield advanced two basis points to 4.65% Commodities
West Texas Intermediate crude rose 4.9% to $95.39 a barrel Spot gold fell 0.9% to $5,126.90 an ounce ©2026 Bloomberg L.P.
