Global equities fell on Thursday as global stocks fall oil near $100 became the market’s dominant theme. Traders reacted to tanker attacks, fresh Iranian threats, and renewed worries about inflation. Risk appetite faded across Wall Street and Europe, while the dollar drew support.
Equities Slide as Energy Shock Deepens
U.S. stocks dropped broadly as oil surged and volatility rose. The Dow and S&P 500 fell about 1.2%, while the Nasdaq lost about 1.4%. In Europe, the STOXX 600 slipped 0.66%. The MSCI All World index fell about 1.2%.
Brent spiked above $100 at one point before easing back. U.S. crude also jumped sharply and stayed elevated. Investors questioned whether emergency reserve releases can offset a sustained shipping disruption. Market focus stayed on the Strait and tanker safety.
Iran Signals Escalation Risk in Hormuz
Iran’s new Supreme Leader Mojtaba Khamenei issued his first remarks since taking office. State media carried a message vowing retaliation and continued pressure in the region. The statement also warned about the Strait of Hormuz and U.S. bases.
Reports said fuel tankers were attacked in Iraqi waters, adding to shipping anxiety. Iraqi officials also cited stoppages at oil ports, according to state media. Analysts said the latest headlines reduced hopes for a quick de escalation. Traders repriced disruption risk accordingly.
Inflation Fears Lift Yields, Cloud Fed Outlook
U.S. inflation data for February matched expectations, but markets largely looked past it. The bigger concern was oil feeding future headline inflation. Higher fuel costs can seep into transport and consumer pricing. That scenario can delay rate cuts.
Global bond yields rose as inflation risk outweighed pure haven demand. The 10 year Treasury yield moved higher to around 4.25% after a quick jump. Investors debated how long energy prices can stay elevated. Some analysts warned the Fed could face a tougher tradeoff.
Private Credit Adds Pressure on Financials
Investors also watched stress signals in private credit. Morgan Stanley shares fell after limits at one private credit fund. The move followed recent actions by Blackstone and BlackRock. The sector has faced scrutiny after a string of credit issues.
Risk aversion supported the dollar and hurt energy importing currencies. Traders trimmed exposure to markets seen as vulnerable to higher fuel bills. The day’s price action reflected both geopolitics and financial system nerves. Markets remain sensitive to new headlines.
