Oil and gas prices surged, stock markets tumbled, and government bond yields rose after the United States and Iran exchanged fresh strikes, and former President Donald Trump declared the shaky ceasefire 'over'. Speaking at a NATO summit in Ankara, Trump also announced he was cutting off trade with Spain over defence spending.
Oil and Gas Markets React
Brent crude, the global benchmark for oil prices, climbed 5% to $77.86 a barrel. The jump reflected heightened geopolitical risk in the Middle East, a key oil-producing region.
Global Stock Market Declines
In Europe, the UK's FTSE 100 fell 1%, or 110 points, to 10,556. Germany's Dax tumbled 1.6%, and Spain's Ibex lost 2%. On Wall Street, the S&P 500 index fell nearly 0.5%, while the Dow Jones slid 0.9% and the Nasdaq slipped 0.3%.
Asian markets also suffered: Japan's Nikkei ended the day 2.1% lower, China's CSI 300 declined 0.77%, and South Korea's Kospi tumbled 5.5%, also hit by a sell-off in semiconductor shares.
Bond Yields Rise on Inflation Fears
Eurozone government bond yields rose to their highest levels in almost a month, as higher oil prices stoked inflation fears. The yield on Germany's 10-year bond rose 5 basis points to 3.034%, the highest since 11 July. The two-year bond yield, more sensitive to European Central Bank interest rate expectations, also climbed 5 basis points to 2.637%, the highest since 22 June.
The yield on the 10-year UK government bond, known as a gilt, climbed 9 basis points to 4.94%.
Markets will continue to monitor developments in the Middle East and trade policy announcements.
