US Stock Selloff Eases Amid Iran Conflict; Oil Prices Surge
US stock markets stabilized after initial declines due to the Iran conflict, while oil prices surged amid supply concerns.
US stock markets showed signs of stabilization on Tuesday following initial declines triggered by escalating tensions in the Middle East. The S&P 500 futures remained relatively unchanged after the benchmark index dropped nearly 1% in the previous session. European markets also rebounded, with the Stoxx Europe 600 rising 0.7% after experiencing its worst day since April.
Oil prices continued their upward trajectory, with Brent crude climbing 2.8% to exceed $83 per barrel. This surge is attributed to concerns over potential disruptions in the Strait of Hormuz, a critical passage for global oil shipments.
In the bond market, the yield on 10-year US Treasuries increased by three basis points to 4.09%, reflecting investor caution. Gold prices also rose, trading above $5,100 an ounce, as investors sought safe-haven assets amid geopolitical uncertainties.
The US-Israeli military actions in Iran have heightened instability in the Middle East, with no clear resolution in sight. Market participants are closely monitoring the situation, particularly the potential impact on oil supply routes. President Donald Trump has proposed measures to secure tanker passage through the Strait of Hormuz, including insurance and naval escorts, as traffic in the vital waterway has been significantly disrupted.
Beata Manthey, a strategist at Citigroup Inc., commented on the situation, stating, "If that happens, that would be very good news for the market. The assumptions from our commodity team are that disruptions are going to be short-lived."
In corporate developments, Blackstone Inc.'s negotiations with New World Development Co. have encountered obstacles due to the reluctance of the Hong Kong developer's controlling family to relinquish control. Bayer AG projected stable profits and sales for 2026, facing challenges from generic competition and ongoing litigation in the US. Adidas AG forecasted increased profits and market share gains through 2028, focusing on retro sneakers and new running and football products.
As the geopolitical landscape remains volatile, markets are expected to react to further developments in the Middle East and their potential economic implications.