Equities looked set to ease after a recent rally, as renewed tensions in the Middle East pushed oil higher and weighed on sentiment. US futures slipped around 0.2% and European futures pointed lower, with investors turning more cautious after reports that US allies in the Gulf may move closer to joining the conflict, while Iran ruled out negotiations.
The move marks a reversal from the prior session’s optimism, when stocks had advanced on hopes of a potential de-escalation. Markets are now refocusing on the risk of a prolonged disruption to energy supply, with Brent crude climbing back above $100 and reinforcing concerns that higher oil prices could feed through into inflation.
That shift is also showing up in rates, with front-end yields pushing higher as traders price a more hawkish policy path and a reduced likelihood of near-term easing. Despite the weaker tone in developed markets, Asian equities outperformed, rising 1.8% as they tracked Wall Street’s earlier gains.
Gold extended its recent decline, suggesting some unwinding of defensive positioning, while crypto also softened. Overall, sentiment remains highly sensitive to geopolitical headlines, with markets oscillating between de-escalation hopes and supply-driven inflation risks.
Data-wise, today we have a raft of PMI data across Europe, the UK, and the US.
• S&P 500 futures −0.2%
• Nasdaq 100 futures −0.2%
• Euro Stoxx 50 futures −0.3%
• US 10-year yield +3 bps to 4.37%
• Bitcoin −0.7% to $70,426
• Gold −0.5% to $4,383
• WTI +3.7% to $91.41
