Oil prices saw a significant increase on Thursday, while global stock markets experienced mixed results amid volatile trading influenced by developments and statements related to the Iran conflict. European stocks recovered slightly, along with certain major U.S. indexes and bond prices, following reports of Iran collaborating with Oman to monitor traffic in the Strait of Hormuz.
However, oil prices surged approximately eight percent worldwide, with U.S. crude prices spiking over 11 percent, in response to U.S. President Donald Trump’s declaration during a televised address that the U.S. would take aggressive action against Iran and bring them to a standstill.
On Wall Street, the trading day ended with a mixed performance as the market prepared for the Good Friday holiday. Gold prices declined as the U.S. dollar strengthened, while government bond yields rose amid expectations of potential inflation spikes prompting central banks to adjust interest rates.
Despite conflicting statements from Tehran and Washington, financial experts advised focusing on factual information amidst the volatile situation. Shipping activities through the Strait of Hormuz have increased recently, and Iran seems to be shifting its strategic focus away from Gulf Cooperation Council targets towards Israeli interests.
Global stocks, as measured by U.S. finance company MSCI, declined by 0.35 percent to 993.18. On Wall Street, the Dow Jones Industrial Average dropped 0.13 percent to 46,504.67, the S&P 500 rose by 0.11 percent to 6,582.69, and the Nasdaq Composite increased by 0.18 percent to 21,879.18.
President Trump’s recent announcements of intensified U.S. actions against Iran over the next few weeks contrasted with his earlier statement indicating a quick exit from Iran. Consequently, European stock indices like the STOXX 600 and FTSEurofirst 300 both decreased by 0.2 percent, while South Korea’s Kospi index fell by 4.7 percent.
Analysts highlighted the critical importance of the status of the Strait of Hormuz, with some questioning whether the key oil passage will reopen soon. Trump’s remarks suggesting the U.S. did not require access to the strait had varying impacts on the market.
Gold prices fell by 1.85 percent to $4,669.05 per ounce, with U.S. gold futures settling down 2.8 percent at $4,679.70. India’s central bank took steps to ban non-deliverable forwards trading to stabilize the rupee’s value, resulting in a two percent currency appreciation, although the sustainability of this rebound remained uncertain.
Brent futures surged by 7.78 percent to $109.03 per barrel, while U.S. West Texas Intermediate settled at $111.54, up by 11.41 percent. Market sentiments turned cautious as Trump’s statements hinted at potential military involvement and threats to infrastructure, prompting defensive reactions.
Yields on benchmark U.S. 10-year notes decreased by 1.6 basis points to 4.305 percent, while the two-year note yield remained steady at 3.803 percent. Eurozone benchmark Bund yields reversed a three-day decline, with traders increasing bets on potential interest rate hikes, leading to a rise in the German 10-year benchmark yield by 0.1 basis points to 2.996 percent.
