Global markets retreated at the end of the week as renewed tensions between the US and Iran reignited concerns over Middle East energy supplies and their impact on global growth.
The MSCI All Country World Index fell 0.2%, Asian stocks dropped 0.9%, and European futures pointed lower after reports that US naval forces responded to Iranian attacks near the Strait of Hormuz.
Oil prices rose, with Brent crude climbing 1% to around $101 a barrel, reflecting fears that prolonged disruption in the strait could threaten global oil and gas flows. Investors largely appeared to believe that the worst-case scenario in the Middle East may still be avoided, even as volatility increased. Markets also weighed broader political and economic developments, including President Trump’s warning that the US could strike Iran “more violently” if a deal is not reached quickly, alongside ongoing negotiations over reopening the Strait of Hormuz.
Elsewhere, the dollar stayed relatively stable, Treasury yields edged higher on inflation concerns linked to energy prices, and gold rose further as a safe-haven asset. Meanwhile, Asian equities remained on track for a fifth straight weekly gain, led by South Korea’s technology sector and continued enthusiasm for AI-related demand.
BoE Governor Bailey is speaking later today, alongside Non-Farm Employment Change data, with forecasts set at a modest +65K.
