$91 Oil Triggers Global Market Volatility as Bond Yields Soar

Oil prices surged to over $91 per barrel after military clashes between the US and Iran escalated, causing global bond yields to spike to multi-year highs. The increase in energy costs has reignited concerns about inflation, leading markets to price in a higher likelihood of an interest rate hike by the Federal Reserve in September.

Fed officials have warned that tighter monetary policy may be necessary if inflation pressures do not ease meaningfully. With oil prices now above $90 per barrel and bond yields at their highest levels since 2008, investors are growing increasingly concerned about the impact on the economy.

The jump in global bond yields has weighed heavily on equity markets, with major indices such as the S&P 500, Nasdaq, and European indices like Germany's DAX and France's CAC posting losses. As Matt Maley at Miller Tabak noted, 'The stock market has been able to ignore these moves so far this year. However, as we have seen in the past, higher yields don't matter for stocks until they do.'