Market Commentary: Monday 23rd March

Stocks extended their selloff as tensions between the US and Iran escalated further, driving a broad risk-off move across assets. Asian equities fell 3.7%, entering correction territory, while US futures dropped ~0.8% and European futures pointed sharply lower. The decline reflects mounting concern that a prolonged conflict could fuel inflation, slow global growth, and force central banks to shift back toward tightening.

Markets are increasingly focused on the risk of an energy-driven inflation shock. Oil prices remained elevated, with Brent holding above $110 a barrel after surging more than 70% this year, as threats to close the Strait of Hormuz intensified. The rise in crude has already prompted a repricing in rates, with traders scaling back expectations for cuts and beginning to consider the possibility of hikes, pushing US 10-year yields up to 4.42%.

The selloff has spread across asset classes, with gold dropping sharply to erase its gains for the year and bonds continuing to weaken. The dollar strengthened as investors sought safety, while sentiment remains highly dependent on geopolitical developments and the duration of the conflict.

• S&P 500 futures −0.8%
• Nasdaq 100 futures −0.9%
• US 10-year yield +4 bps to 4.42%
• Bitcoin −0.6% to $67,764
• Gold −7.8% to $4,141
• WTI +2.2% to $100.40

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