Investors are cautiously watching how the U.S. strike on Iranian nuclear targets over the weekend will impact global markets, with world shares slipping and oil prices briefly hitting five-month highs before retracing gains.
Why it matters: The attacks have intensified the ongoing conflict between Israel and Iran, adding further volatility to financial markets and raising risks to global trade and inflation.
The details:
- Oil prices climbed 0.4%, after spiking as much as 5.7% overnight.
- S&P 500 futures and Nasdaq futures both increased by 0.2%, while the TSX future rose by 0.32%.
- Treasury yields saw little change, suggesting a belief that this will be a short conflict.
- In Europe, Germany’s DAX fell by 0.27%, Paris’ CAC 40 dropped 0.45%, and Britain’s FTSE 100 was down marginally.
Tokyo’s Nikkei 225 edged 0.1% lower, with gains for defense contractors, oil companies, and miners balancing broader losses, while Hong Kong’s Hang Seng index climbed 0.7%.
What they’re saying:
- “I believe the thinking is that this will be a short conflict. The significant hit by the Americans should be effective, after which, we’ll return to business as usual without requiring a panicked response,” said Neil Newman, managing director of Atris Advisory Japan.
- “The current geopolitical escalation provides the fundamental catalyst for Brent prices to traverse higher and potentially spiral towards $100, with $120 per barrel appearing increasingly plausible,” said Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet.
What’s next: Investors will closely monitor developments in the Middle East conflict and assess the potential impact on global markets, trade, and inflation.