Market Commentary: Thursday 2nd April

Oil prices surged while global financial markets fell after President Trump warned the US could strike Iran “extremely hard” within weeks, dampening hopes for a quick resolution to the ongoing Middle East conflict.

Brent crude jumped 6.6% to nearly $108 per barrel as the Strait of Hormuz remained effectively closed, tightening supply. Equity markets reacted negatively, with Asian shares dropping 2.5%, S&P 500 futures down 1.4%, and European markets set to open lower. Investors grew concerned that prolonged conflict and elevated oil prices would weigh on global growth, while the dollar strengthened and US Treasuries sold off on inflation fears.

Trump’s speech marked a shift from earlier optimism about ending the conflict, instead signalling possible escalation without a clear timeline or exit strategy. This increased uncertainty rattled investors, with analysts warning of continued volatility and long-term damage to global supply chains, particularly if disruptions in the Strait of Hormuz persist.

Other assets also declined, including Bitcoin and precious metals, while bond yields rose. Meanwhile, conflicting narratives emerged as Iran denied requesting a ceasefire, underscoring ongoing geopolitical tensions and leaving markets bracing for further downside risk.

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