As of today, major U.S. stock indexes have experienced significant declines: the S&P 500 is down 0.74%, the Dow Jones is down 0.87%, and the Nasdaq 100 is down 0.94%. The S&P 500 and Nasdaq 100 have fallen to 6.5-month lows, driven by increasing crude oil prices, which have risen over 2%, and climbing global bond yields amid ongoing geopolitical tensions. Notably, the 10-year U.S. Treasury yield hit an 8.25-month high of 4.48%.
These stock market declines occur against the backdrop of a protracted conflict in Iran that has entered its 27th day. Iran and Israel exchanged missile fire today, with Saudi Arabia intercepting two ballistic missiles aimed at Riyadh. The International Energy Agency reported that the Iran war is disrupting roughly 7.5% of global oil supply, and analysts, including Goldman Sachs, warn that crude prices could surpass the 2008 record of $150 per barrel if market disruptions continue.
In related news, China has launched investigations into U.S. trade practices in response to U.S. probes targeting China, potentially impacting global supply chains and increasing market volatility. Market sentiment is further strained, with investors now assessing a 6% probability of a 25 basis point rate hike by the Federal Reserve at its upcoming policy meeting.
