Stocks Fall in Volatile Trading as War Drags On: Markets Wrap
(Bloomberg) — Stocks fell in choppy trading and oil rose as traders grappled with a wide range of possible outcomes for the war in the Middle East, with fighting continuing as President Donald Trump pushed for talks.
S&P 500 contracts were 0.3% lower after swinging between gains and losses. European stocks dropped 0.4%. Treasuries fell, with the two-year yield climbing two basis points to 3.88%. Brent traded 2.2% higher above $102 a barrel. The dollar gained 0.3% while gold was little changed.
Traders continue to juggle a barrage of headlines around the US-Israeli war against Iran after Trump signaled a possible end to hostilities on Monday following what he described as productive talks. The positive sentiment from those comments faded after the Wall Street Journal reported that US allies in the Persian Gulf are inching toward joining the fight against Tehran.
“It’s a very tricky situation,” said Arnaud Girod, head of cross-asset strategy at Kepler Cheuvreux. “If there’s a deal in five days then there’s a chance the market can bounce back and investors may be able to look through the crisis but if there’s not, a recession is a possibility. The range of outcomes is very large still, which explains the volatility.”
The whipsawing markets suggest investors remain cautious. Renewed tensions risk keeping oil prices elevated, potentially stoking inflation and reinforcing expectations that policymakers may delay easing or even tighten monetary policy.
“I will not put too much hope on this bet for now until I see Iran’s next course of action in this war,” said Gerald Gan, chief investment officer at Reed Capital Partners in Singapore. Gan said he has increased his cash exposure, while adding put options on the S&P 500 Index.
Tensions remained high. Iran launched overnight missile and drone attacks on the Israeli cities of Eilat, Dimona and Tel Aviv, as well as US bases in the Middle East. Saudi Arabia said it intercepted a drone in its eastern region, and Kuwait said some power lines were put out of service after an Iranian attack. Sirens sounded in Bahrain.
In Iran, the Fars news agency reported US-Israeli attacks that damaged a gas pressure-regulation plant and an administrative building in the central city of Isfahan. There was also a strike on a pipeline supplying gas to the Khorramshahr Combined Cycle Power Plant in southwestern Iran, according to Fars.
Markets remain on “hyper alert” for the next development, said Anna Wu, a cross asset strategist at Van Eck Associates Corp.
“Most investors are still waiting for some sort of talk to be confirmed between Iran and the US for clarity,” she said.
Corporate News:
Estée Lauder Cos. said it’s in talks to buy Puig Brands SA in a deal that would create a cosmetics giant with about $20 billion in annual sales. Revolut Ltd.’s revenue surged 46% last year as it boosted subscriptions from a rising number of customers and increased its wealth offerings. Apollo Global Management Inc. is curbing redemptions from one of its largest non-traded private credit funds for retail investors, becoming the latest alternative asset manager to grapple with a surge in such requests. Sumitomo Mitsui Financial Group Inc. is working on plans for a potential takeover of Jefferies Financial Group Inc., according to the Financial Times. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.4% as of 9:20 a.m. London time S&P 500 futures fell 0.3% Nasdaq 100 futures fell 0.3% Futures on the Dow Jones Industrial Average fell 0.4% The MSCI Asia Pacific Index rose 1.8% The MSCI Emerging Markets Index rose 1.6% Currencies
The Bloomberg Dollar Spot Index rose 0.3% The euro fell 0.2% to $1.1585 The Japanese yen fell 0.2% to 158.69 per dollar The offshore yuan fell 0.1% to 6.8932 per dollar The British pound fell 0.3% to $1.3392 Cryptocurrencies
Bitcoin rose 0.2% to $71,006.7 Ether fell 0.4% to $2,151.88 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.36% Germany’s 10-year yield was little changed at 3.01% Britain’s 10-year yield advanced one basis point to 4.93% Commodities
Brent crude rose 2.1% to $102.01 a barrel Spot gold rose 0.1% to $4,413.60 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Anand Krishnamoorthy and Neil Campling.
©2026 Bloomberg L.P.
