Global Markets Slump on Surging Oil and Rate-Hike Fears
Global markets took a downturn this week as oil prices surged past $100 per barrel. Rising tensions between the US and Iran fueled fears of potential supply disruptions, leading to increased inflationary pressure. The escalating situation weighed on market sentiment, causing global stock indexes to close lower.
The S&P 500 (SP500) shed 0.6%, while the Dow DJI lost 426 points. The European equities SXXP ended the week 1.6% lower amid concerns over macroeconomic headwinds from higher energy prices and interest rates. The UK's FTSE 100 UKX equities fell 1.7%, with Germany DAX and France CAC markets slipping 1.3% and 1%, respectively.
The US Treasury yield climbed to its highest level since October 2023, boosting expectations for rate-hike action at the Federal Reserve's upcoming meeting next week. The European Central Bank raised interest rates again in September, citing persistent inflationary pressures from the Middle East conflict and warning that inflation could remain elevated for an extended period.