Middle East Conflict Sends Oil Prices Soaring

The escalating conflict in the Middle East has pushed oil prices above $95 per barrel, with Brent Crude breaking through its six-week high. European natural gas prices have also reached their highest level since January 2023, while global bond yields climbed to near two-decade highs.

This surge in energy costs has raised concerns that supply-chain inflationary pressures will worsen further, driving the STOXX Europe 600 Index to a one-month low. The index slipped 0.54 points or 0.08% to 646.92 in early trading, with media stocks leading the decline at 1.14%. Energy stocks bucked the trend, however, rising 0.77%.

The U.S. military's second round of airstrikes against Iranian targets within three days has fueled risk-averse sentiment in markets. President Trump downplayed the likelihood of reaching a diplomatic agreement with Iran, while traders remain nearly certain that the European Central Bank will raise rates by a quarter point next week.