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Markets started strong today… and then quickly flipped.
US futures gave up early gains as fresh tensions in the Middle East rattled sentiment. Contracts on the S&P 500 and Nasdaq 100 fell around 0.5%, while Europe’s Stoxx Europe 600 dropped close to 1%.
The trigger? Escalation.
Reports from Iran’s FARS news agency claimed missiles struck a US warship after warnings were ignored — a development that immediately spooked markets already on edge. At the same time, uncertainty around shipping routes through the Strait of Hormuz continues, keeping energy markets volatile.
Oil tells the story best.
Brent crude oil jumped more than 4%, pushing above $112 a barrel. Every spike in oil right now feeds directly into inflation fears — and that’s starting to show up across asset classes.
Bond yields moved higher, with the US 10-year climbing to around 4.4%, while the dollar strengthened as investors leaned toward safer assets. Interestingly, gold slipped — a reminder that this isn’t a clean “risk-off” move, but a market struggling to price multiple risks at once.
There are still pockets of optimism.
Asian markets surged, with Taiwan and South Korea rallying over 4–5%, driven by continued momentum in AI-linked stocks. On the corporate side, eBay jumped after a surprise takeover bid, while Coinbase and Oracle saw gains on positive developments.
But zoom out, and the picture is clear.
Markets are trying to hold up on strong earnings and AI optimism — but every escalation in oil and geopolitics pulls them back.
For now, it’s a tug of war. And oil is still winning.
