Stocks Slip, Oil Gains With Focus on US-Iran Talks: Markets Wrap
(Bloomberg) — Stocks and bonds both edged lower and oil climbed as persistent Middle-East tensions and conflicting signals from the US and Iran about their ceasefire talks sapped risk sentiment.
MSCI’s Asian share benchmark fell 0.9%, snapping a two-day gain, as elevated energy costs threatened to stoke inflation and crimp economic growth. Equity-index futures for the US and Europe both indicated modest losses. The MSCI All Country World Index headed for its first drop this week, indicating that earlier optimism may be fading as the US and Iran wrangle over talks with no end to war in sight.
Brent crude rose 1.9% to about $104 a barrel, rebounding from Wednesday’s declines. Since then, the US insisted negotiations were ongoing, but Iran rejected outreach by President Donald Trump. Oil has stayed volatile this week, with losses typically followed by gains the following day.
The higher crude prices showed up in the bond market with yields on the Treasury 10-year note rising two basis points to 4.35%. The benchmark yield has jumped about 40 basis points since the war began, reinforcing expectations that policymakers may keep interest rates elevated due to faster inflation. Bonds also dropped in Japan and Australia.
“Markets have been extremely headline driven as we keep getting different, conflicting messages on the Iran situation,” said Fabien Yip, a market analyst at IG International. “Markets need more certainty on what the outcome would be. Until there is agreement on the truce terms, unfortunately we will still see these swings.”
Markets had been modestly optimistic this week as US efforts to end the conflict appeared to gain momentum, overshadowing reports that Iran had rejected a truce. Amid the mixed signals on negotiations, Washington ordered thousands of troops to the region, raising concern that Trump may be gearing up for the kind of risky ground invasion he once opposed.
On Thursday, Israel said it completed a wave of strikes in Isfahan, Iran, targeting infrastructure in several areas.
Trump has been pushing for talks with Iran in a bid to halt a conflict that’s approaching the four-week mark. The White House said the US has been in productive talks with Iran in the last three days and has compiled a plan stipulating the Islamic Republic dismantle its main nuclear facilities and use a reduced missile arsenal in self-defense only.
What Bloomberg strategists say…
“Investors may be finding it increasingly difficult to discount the energy shock’s mounting economic toll. Until the more optimistic rhetoric out of the US is backed by more tangible actions to reopen the Strait of Hormuz, the path of least resistance for regional equities remains tilted to the downside.”
— David Savage, Macro Squawk. For full analysis, click here.
But Tehran is signaling little willingness to compromise. A move by the US to start indirect talks is illogical and not viable at this stage, the semi-official Fars news agency reported. Amid all this, traders stayed focused on the Strait of Hormuz — a vital artery for Middle East oil flows — that remains effectively closed for ships.
The Iranian parliament is working on a draft bill that would impose a fee on vessels seeking safe passage through the Strait of Hormuz, the Fars news agency also reported.
“Markets are positioning for a conflict resolution, despite lingering strategic ambiguity,” said Elias Haddad at Brown Brothers Harriman & Co. “Ultimately, Iran’s response to the US de-escalation pivot will decide whether peak fear is behind us or still ahead.”
Meanwhile, BlackRock Inc. President Rob Kapito said investors may be underestimating the risks stemming from the Iran war, which are likely to weigh on growth and drive inflation higher even if the conflict ends soon.
In other corners of the market, shares in South Korea fell 2.3%. Asian memory and storage stocks tracked losses in US peers on concerns of lower demand, after Google researchers touted a new compression technique for large language models and vector search engines.
Meanwhile, concerns over the conflict in the Middle East have rippled across Asia. South Korea has set up an emergency task force to prepare for adverse scenarios, Japan is reviewing its supply chain for petroleum-related products, and the Philippines has declared a national emergency.
“There’s really no way to know at this point what the facts are regarding the state of negotiations, so expect more whipsaw action as things continue to progress,” said Bespoke Investment Group strategists. “While Iran still holds some cards, the chips are stacked heavily against them.”
Corporate Highlights:
JetBlue Airways Corp. is considering the option of selling itself to a competitor, Semafor reported, citing people familiar with the matter. Meta Platforms Inc. is cutting several hundred jobs as part of a restructuring effort that’s impacting several teams at the company, including sales, recruiting and the Reality Labs hardware division. Arm Holdings Plc, which made its name licensing technology to semiconductor makers, said it will sell its own chips for the first time — a move forecast to generate about $15 billion annually within five years. Merck & Co. agreed to buy Terns Pharmaceuticals Inc. for $6.7 billion, giving the multinational company access to a promising new leukemia treatment as it faces the patent expiration of its bestselling cancer drug. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.2% as of 2:04 p.m. Tokyo time Japan’s Topix fell 0.7% Australia’s S&P/ASX 200 fell 0.1% Hong Kong’s Hang Seng fell 1.4% The Shanghai Composite fell 0.7% Euro Stoxx 50 futures fell 0.4% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1569 The Japanese yen was little changed at 159.42 per dollar The offshore yuan was little changed at 6.9050 per dollar Cryptocurrencies
Bitcoin fell 0.4% to $70,712.18 Ether fell 0.9% to $2,147.71 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.35% Japan’s 10-year yield advanced 2.5 basis points to 2.275% Australia’s 10-year yield advanced five basis points to 5.00% Commodities
West Texas Intermediate crude rose 1.9% to $92.06 a barrel Spot gold rose 0.3% to $4,518.76 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Hsu and Sarah Chen.
©2026 Bloomberg L.P.
