Market Highlights

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $74.80 during the Asian trading hours on Monday. The WTI price has climbed to the highest level since January after the United States (US) launched direct attacks against Iran, raising fears of potential disruptions to energy supplies from the Middle East, particularly through the Strait of Hormuz. Gold price (XAU/USD) extends its steady intraday descent from the $3,400 neighborhood and refreshes its daily low heading into the European session. The US attack on Iran’s nuclear facilities on Sunday raises the risk of a broader conflict in the Middle East and underpins the US Dollar's (USD) status as the global reserve currency. Moreover, the Federal Reserve's (Fed) hawkish signal last week turns out to be another factor lending support to the Greenback and exerting downward pressure on the non-yielding yellow metal.

Oil trimmed earlier gains and equity futures remained lower after White House press secretary Karoline Leavitt said President Trump will decide within two weeks whether to back Israel militarily in its conflict with Iran. The remarks offered some short-term clarity but did little to resolve broader uncertainty around potential US involvement and the risk of renewed energy-driven inflation. S&P 500 contracts slipped 0.9% in thin holiday trading. Europe’s Stoxx 600 dropped 0.8%, falling for a third straight session. Asian equities declined 1.4%, with losses concentrated in Japan and South Korea. West Texas Intermediate rose 0.7% to $75.8 a barrel. Brent crude advanced past $78 a barrel, extending gains in a week where market reaction to the Middle East conflict has been most concentrated in oil. The dollar was little-changed against a basket of currencies, after paring earlier gains.

A rally in stocks fizzledout after Federal Reserve Chair Jerome Powell warned that tariff-driven economic uncertainty and inflation risk continued to complicate the central bank’s bid to ease monetary policy in earnest. Gains in bonds waned. The dollar barely budged. Equities closed little changed, with the S&P 500 ending below 6,000 after briefly crossing that mark. Powell noted that increases in tariffs are likely to boost prices, while adding that the effects on inflation could be more persistent. He also declined to say if he’ll stay on after his term ends. Treasury two-year yields, which are more sensitive to imminent Fed moves, almost erased a decline that had earlier reached seven basis points. Equities declined as investors saw a growing likelihood of direct US involvement in Israel’s conflict with Iran, and Federal Reserve Chair Jerome Powell warned of meaningful inflation ahead.

Wall Street’s concerns that an escalation of tensions in the Middle East could trigger a more direct US involvement spurred a slide in stocks, which also dropped as weak economic data lifted bonds ahead of the Federal Reserve decision. Oil hit its highest since January. Risk-off sentiment prevailed, with the S&P 500 down nearly 1%. West Texas Intermediate settled around $75 a barrel. A gauge of crude-market volatility rose to a three-year high. The dollar climbed the most in over a month. Aside from geopolitical risks, Treasuries rose as tepid reports on retail sales, housing and industrial output supported bets the Fed will cut rates at least once more in 2025 if the rally in crude doesn’t turn out to be a threat to the disinflationary path. Oil traded near a five-month high on concern escalating tensions in the Middle East will trigger more direct US involvement. Equities were mixed before a Federal Reserve monetary policy decision.

Relative calm returned to global markets, with stocks climbing and oil sinking alongside gold as fears subsided that Israel’s war against Iran would escalate into a wider conflict. News reports that Tehran wants to restart talks over its nuclear program also fueled risk-on sentiment. Equities bounced after Friday’s slide, with the S&P 500 up about 1%. West Texas Intermediate settled below $72 a barrel after spiking at the start of the session. The dollar was little changed. Longer-maturity Treasuries continued to lag the market even after a $13 billion sale of 20-year bonds drew the expected yield level — a notable improvement from last month’s auction disappointment that spurred a broad selloff.

Wall Street buckled as reports of Iran’s retaliation for Israel’s attack on its nuclear facilities deepened concerns that the conflict is escalating, with oil jumping and stocks taking a hit. The S&P 500 lost over 1%, wiping out this week’s advance. Airline and travel companies tumbled, while energy producers and defense shares rose. West Texas Intermediate crude futures surged more than 7%, the most since March 2022. Gold hovered near its all-time high. Treasuries fell as a surge in oil stoked concern about a resurgence in inflation. The dollar edged up. As markets reopened following a weekend of strikes between Israel and Iran, investors held back on making big bets in either direction. Chinese stocks swung between gains and losses. European equity futures edged lower. The dollar was little changed, while gold held near a record high.

A solid sale of long-term Treasuries reduced fears that spiraling deficits are causing investors to shun the bonds, with the market also gaining as soft inflation fueled bets the Federal Reserve will cut rates should the economy decelerate. The dollar hit a three-year low. Stocks rose. US 30-year yields approached the 4.8% mark after the $22 billion auction. The S&P 500 closed at the highest since Feb. 20, ending at a striking distance of its all-time high. Oracle Corp. climbed to a record on a strong sales outlook. Geopolitical worries briefly weighed on equities as ABC News reported Israel is considering military action against Iran. Oil pared most of its losses. Crude oil jumped the most in more than three years, stocks slid and haven assets including government bonds and gold rose after Israel attacked Iran’s nuclear program sites in a major escalation of tensions in the Middle East.

After a period of euphoria that saw the S&P 500 inching close to its all-time highs, stock markets hit the brakes, weighed down by the big tech sector. Early gains had been fueled by surprisingly benign inflation data, which stoked hopes for Federal Reserve rate cuts and led to a drop in bond yields. The three-day advance in equities was halted, with Apple Inc. notably down about 2% and Tesla Inc. little changed after a nearly 3% surge. However, after hours, Oracle Corp. jumped following revenue that beat estimates. Treasuries also climbed after a solid $39 billion sale of 10-year debt. This advance was led by shorter maturities, with two-year yields dropping below 4%. The dollar, meanwhile, hit its lowest level since 2023. The mood soured later in the session. Equity-index futures fell along with the dollar after President Donald Trump announced he would set unilateral tariff rates within two weeks, reigniting trade tensions. In this context, haven assets such as Treasuries and gold saw their value rise.

Wall Street investors closely monitoring trade discussions between the US and China drove stocks higher as Commerce Secretary Howard Lutnick said negotiations went really, really well. Treasuries and the dollar saw small moves ahead of a key inflation report. The S&P 500 finishedless than 2% away from its record. Tesla Inc. led gains in megacaps. JM Smucker Co. sank the most in nearly four decades after saying tariffs increasing costs in its coffee business will hurt profit. Bonds barely budged after a $58 billion sale of three-year notes. That’s the firstin a trio of offerings that will culminate in Thursday’s sale of 30-year debt.

Wall Street traders glued to their screens amid commercial talks between the US and China drove stocks mildly higher, with officials hinting at progress in negotiations. Bonds rebounded after Friday’s selloff as inflation expectations eased. The dollar fell. The S&P 500 eked out gains, remaining nearly 2% away from its February peak. Tesla Inc. jumped about 4.5% as President Donald Trump reiterated his desire to end his spat with Elon Musk, saying he would retain Starlink internet service at the White House and that he wished his billionaire backer “very well.” Apple Inc. slipped over 1% as it hasn’t featured any noticeable artificial- intelligence advancements during a conference.