Stocks Decline as US-Iran Risks Spur Rally in Oil: Markets Wrap
(Bloomberg) — Heightened geopolitical worries sent stocks lower while extending a surge in oil and keeping a lid on bonds amid perceived inflation risks. Gold hovered near $5,000, while selling shook alternative asset managers after a private credit fund halted redemptions.
As a sense of caution prevailed, the S&P 500 fell after a rebound from a tech-fueled selloff. Walmart Inc. slid on a conservative outlook, but the giant retailer’s comparable sales in the US beat expectations. Crude hit the highest since August. Treasuries barely budged. The dollar rose.
President Donald Trump said the US has to “make a meaningful deal” with Iran while adding that the next 10 days will tell whether there will be an accord. Iran is a “hot spot” right now even as officials from both sides engage in “good talks,” Trump said. He also noted his son-in-law Jared Kushner will be an “envoy of peace.”
The US military is stationing a vast array of forces in the Middle East, including two aircraft carriers, fighter jets and refueling tankers, giving Trump the option for a major attack against Iran as he pressures the country to strike a deal over its nuclear program.
American military buildup in the region means Iran’s window to reach a diplomatic agreement over its atomic activities is at risk of closing, according to the head of the United Nations nuclear watchdog. A potential war would put flows at risk from a region that pumps about a third of the world’s oil.
The rising risk of an attack in the Middle East is impairing risk appetite near-term, according to Thomas Lee at Fundstrat Global Advisors.
Also dimming sentiment among investors was Blue Owl Capital Inc.’s decision to restrict withdrawals from one of its private credit funds that raised concern over the risks bubbling under the surface of the $1.8 trillion market. Its shares sank about 6%, dragging down industry peers like Apollo Global Management Inc., Ares Management Corp. and TPG Inc.
Some traders also attributed the risk-off mood to caution ahead of Friday’s readings on the economy and inflation, particularly after minutes of the Federal Reserve’s latest meeting meeting showed renewed concerns about price pressures.
The S&P 500 pared its drop to 0.3% in the last stretch of trading, but nearly 300 of its shares retreated. The yield on 10-year Treasuries dropped one basis point to 4.07%. A $9 billion sale of 30-year Treasury Inflation-Protected Securities was strong. West Texas Intermediate topped $66.
Why US-Iran Tensions Put Focus on Strait of Hormuz: QuickTake
“Crude oil prices are rising on the anticipation of possible military action in Iran,” said Louis Navellier at Navellier & Associates. “The US and Iran are expected to meet again, and those negotiations are expected to be closely watched.”
With Iran’s military proxies greatly weakened and the economy in crisis, the country doesn’t find itself in a very strong negotiating position, so the markets likely expect a diplomatic resolution, according to Dennis Follmer at Montis Financial.
“Right now, stocks have not priced in the tensions between the US and Iran. That seems appropriate,” he said.
One of the biggest threats to stocks from the Iran situation would be if they were to shut down the Strait of Hormuz – a key global shipping lane. Follmer says he believes this is a “low probability risk,” given the amount of US military assets gathering in the region and Iran’s economic need to get oil out through the Strait.
“Given the likelihood of a diplomatic solution and that the resulting volatility from an actual armed conflict would be fairly contained, we think any portfolio changes are unwarranted,” Follmer noted.
US PREVIEW: Inflation Likely Weighed on Real Holiday Spending
Traders also kept an eye on the latest economic readings.
Jobless claims dropped by the most since November, adding to evidence of stabilization in the labor market. Pending sales of existing homes fell in January to a record low. The US annual trade deficit with China shrank in 2025 to the smallest in more than two decades — and widened to record levels with Mexico and Vietnam — as Trump’s sweeping tariffs reordered global trade.
On Friday, the government will issue its first estimate of gross domestic product for the fourth quarter, a period that included the longest-ever federal government shutdown. The latest report card on the economy is projected to show growth cooled to a still-solid annualized pace after expanding in the prior quarter at the quickest rate in two years.
Consumers probably remained the economy’s primary driver despite grumbling about the cost of living and anxiety over job prospects. The Bureau of Economic Analysis on Friday will also release the Fed’s preferred inflation gauge.
Corporate Highlights:
Amazon.com Inc. has officially dethroned Walmart Inc. as the biggest global company by revenue, a milestone attesting to the massive scale the e-commerce and cloud-computing giant has achieved since its humble beginnings in 1994 as an online bookseller in Jeff Bezos’ Seattle-area garage. West Virginia sued Apple Inc. Thursday, alleging it has knowingly allowed users to store and distribute child sexual abuse material on its iCloud platform. New York Governor Kathy Hochul has pulled a proposal that would have allowed for commercial robotaxi services outside New York City, a blow to Alphabet Inc.’s Waymo as it seeks to aggressively expand its driverless fleet this year. OpenAI is close to finalizing the first phase of a new funding round that is likely to bring in more than $100 billion, according to people familiar with the matter, a record-breaking financing deal that would give the startup additional capital to build out its artificial intelligence tools. AppLovin Corp. is preparing to build a social networking platform after the mobile advertising company’s failed bid to buy TikTok’s assets outside of China last year. JPMorgan Chase & Co. said President Donald Trump improperly named the bank’s chief executive officer, Jamie Dimon, as a defendant in his lawsuit over closure of his accounts in order to file the case in Florida state court. Bank of America Corp. is committing $25 billion to private-credit deals, joining its Wall Street rivals in putting its own balance sheet behind lending in the fast-growing market, according to people with knowledge of the matter. Morgan Stanley chopped pricing in half for clients trading private companies’ shares on its newly acquired EquityZen platform, undercutting competitors as it looks to expand in a growing market. CME Group Inc. is moving closer to crypto’s always-on trading model, saying it will allow futures and options on digital assets to trade 24 hours a day later this year. Johnson & Johnson is preparing a potential sale of the orthopedics unit that it has been planning to separate, with big buyout firms already circling, according to people familiar with the matter. Ted Sarandos, co-chief executive officer of Netflix Inc., said his company’s acquisition of Warner Bros. Discovery Inc. will lead to more films in theaters, addressing a key complaint from Hollywood in the high-stakes battle for one of the industry’s iconic studios. Deere & Co., the world’s largest farm-machinery maker, boosted its annual profit outlook, anticipating a long-awaited upturn in the agriculture economy. DoorDash Inc. gave an outlook for orders in the current quarter that surpassed Wall Street’s expectations, a testament to its efforts to expand business beyond restaurant takeout. Carvana Co.’s higher-than-expected costs dented its fourth-quarter profit in a sign of growing pains as the company pursues rapid growth. Figma Inc., a creative software maker, gave an annual revenue outlook that topped estimates, easing Wall Street anxiety that the business is threatened by the emergence of rival artificial intelligence products. Six Flags Entertainment Corp. reported 2025 earnings and revenue that were slightly ahead of analyst estimates as the amusement park operator works to rebound from lackluster attendance.
What Bloomberg Strategists say…
“Despite the healthy foreign inflows into US markets, US stocks are still dead last in a global ranking of benchmarks again this year. No matter how you look at it, US assets are underperforming as the US economy has so far been paying the biggest price for the trade war, and a broadening of earnings growth globally will make this trend difficult to reverse.”
—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 0.3% as of 4 p.m. New York time The Nasdaq 100 fell 0.4% The Dow Jones Industrial Average fell 0.5% The MSCI World Index fell 0.3% Bloomberg Magnificent 7 Total Return Index fell 0.2% Philadelphia Stock Exchange Semiconductor Index fell 0.5% IShares Expanded Tech-Software Sector ETF fell 0.3% The Russell 2000 Index rose 0.2% Currencies
The Bloomberg Dollar Spot Index rose 0.1% The euro fell 0.1% to $1.1770 The British pound fell 0.3% to $1.3460 The Japanese yen fell 0.2% to 155.08 per dollar Cryptocurrencies
Bitcoin rose 1.2% to $67,113.68 Ether rose 0.5% to $1,950.95 Bonds
The yield on 10-year Treasuries declined one basis point to 4.07% Germany’s 10-year yield was little changed at 2.74% Britain’s 10-year yield was little changed at 4.37% The yield on 2-year Treasuries was little changed at 3.46% The yield on 30-year Treasuries was little changed at 4.70% Commodities
West Texas Intermediate crude rose 2.4% to $66.73 a barrel Spot gold rose 0.4% to $4,999.94 an ounce ©2026 Bloomberg L.P.
