Global Markets Plunge Amid Ongoing Iran-US Tensions

Global stock markets declined sharply on Wednesday following a fresh round of US airstrikes on Iranian military targets near the Strait of Hormuz. The escalation in tensions pushed oil prices to five-week highs, with Brent crude up 0.6% at $95.18 per barrel.

The increased energy costs have added upward pressure on bond yields, which had already been rising due to fiscal concerns. Stocks had been relatively resilient to the increase in yields but are now feeling the strain.

Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management, noted that the recent spike in energy prices has put additional upward pressure on bond yields. He also stated that 'with the market already pricing quite a hawkish outlook for the Fed, we think there's much more scope for downward surprises for the dollar than there is for some of the other currencies.'

The US dollar index rose 0.1% to 99.734, nearing its highest level since August 17, as investors bet on a potential interest rate hike by the Federal Reserve.