Stocks Fall as Bond Rout Deepens After Jump in Oil: Markets Wrap
(Bloomberg) — The selloff in global bonds deepened after another jump in oil prices fanned fears that the war in the Middle East is fueling inflation. Stocks fell before Friday’s jobs report.
The yield on 10-year Treasuries climbed four basis points to 4.17%, on course for its biggest weekly advance since April. S&P 500 futures retreated 0.7%. The dollar gained 0.2% while gold approached $5,100 an ounce.
West Texas Intermediate rose 6.7% to top $86 a barrel for the first time since 2024. Qatar’s energy minister told the Financial Times the conflict may force Gulf energy exporters to shut down production within weeks, a move that could drive oil toward $150 a barrel. US gasoline pump prices advanced to the highest level since September 2024.
In the latest developments in the Middle East, Iran fired a barrage of missiles and drones targeting a number of Gulf countries overnight. Israel — acting with the US — maintained airstrikes on the Islamic Republic. An Iranian official said a US-owned oil tanker was attacked near Kuwait, according to Tasnim news agency.
Friday’s market moves are capping a week of sharp swings in which investors repeatedly recalibrated their outlook on the impact of the US-Israeli war against Iran. Fears that a near-complete halt in traffic through the Strait of Hormuz could trigger a new inflation spike have led investors to scale back bets on Federal Reserve interest-rate cuts.
“This is an anxiety not only about how long the conflict goes on, but what kind of effect it’s going to have on the mix between growth and inflation,” Peter Oppenheimer, chief global equity strategist at Goldman Sachs Group Inc., told Bloomberg TV. “The issue really is 20% of world supplies are going through that channel, it’s obviously very, very significant.”
The employment report is expected to show hiring moderated last month after a strong reading in January, and unemployment held steady. Traders are expecting that a stronger-than-expected jobs report will buoy equities, even though a weaker print would give the Fed more reason to consider rate cuts.
“The market would likely interpret robust job creation as evidence that the US economy remains on solid footing,” said Florian Ielpo, head of macro research at Lombard Odier Investment Managers. “This would accelerate the current rapid return to US equities and further fuel the reverse rotation we’ve observed over the past two weeks.”
Traders slashed bets on Bank of England rate cuts for 2026, pricing just about a 50% chance of a quarter-point move. The yield on two-year gilts surged 14 basis points to 3.94%. Money markets are also fully pricing in that the European Central Bank will raise borrowing costs this year, a turnaround from a week ago when a cut was viewed more likely.
This week’s spike in Treasury yields is a sharp reversal from last month when they notched their sharpest drop in a year. Swaps now price between one and two Fed cuts for 2026 compared to as many as three a week ago. The dollar, meanwhile, has reclaimed its status as the ultimate haven as it headed for its best week in more than three years.
“Unless there can be some real political breakthrough that leads to a ceasefire, the dollar won’t be ready to resume a decline anytime soon,” ING Bank strategist Chris Turner wrote in a note. “The story will remain one of governments trying to handle the fallout of high energy prices, a negative for bond markets around the world.”
What Bloomberg Strategists say…
“The dollar has rallied amid the latest downturn in risk sentiment. The poor showing of other perceived safe-haven assets should keep it in the ascendancy. Government bonds are likely off the menu, as long as the market narrative is being driven by rising energy costs and the upside risk to inflation.”
— Conor Cooper, Macro Squawk. Click here to read the full analysis.
Corporate Highlights:
An experimental obesity shot from Roche Holding AG and Zealand Pharma A/S failed to meet industry expectations in a study, casting doubt on their prospects of competing in the fast-growing market and sending their shares lower. Gap Inc. reported fourth-quarter sales and profit that came in slightly below expectations, as two of its apparel chains underperformed. Oracle Corp. is planning to ax thousands of jobs among its moves to handle a cash crunch from a massive AI data center expansion effort. Marvell Technology Inc. shares are up 12% in premarket trading after a stronger-than-expected first-quarter outlook from the chipmaker. German media group Axel Springer SE has agreed to buy UK newspaper publisher Telegraph Media Group for £575 million ($766 million) in cash, torpedoing a rival bid from Daily Mail & General Trust Plc. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.7% as of 7:51 a.m. New York time Nasdaq 100 futures fell 0.9% Futures on the Dow Jones Industrial Average fell 0.6% The Stoxx Europe 600 fell 1% The MSCI World Index fell 0.2% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.4% to $1.1561 The British pound fell 0.1% to $1.3337 The Japanese yen fell 0.2% to 157.94 per dollar Cryptocurrencies
Bitcoin fell 1.8% to $69,835.57 Ether fell 1.7% to $2,045.8 Bonds
The yield on 10-year Treasuries advanced four basis points to 4.17% Germany’s 10-year yield advanced two basis points to 2.86% Britain’s 10-year yield advanced 10 basis points to 4.64% Commodities
West Texas Intermediate crude rose 6.7% to $86.40 a barrel Spot gold rose 0.1% to $5,089.02 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jan-Patrick Barnert and Rose Henderson.
©2026 Bloomberg L.P.
