Global Markets Shaken by ECB Rate Hike and Oil Price Surge
Global markets remained nervous on Thursday as investors braced for key US inflation data ahead of the Federal Reserve's rate-setting meeting next week. The European Central Bank (ECB) had already lifted its interest rates for a second time this year, and bond yields in major economies hovered near multi-decade highs.
Oil prices continued to climb, with Brent crude futures jumping 3.8% to $105 a barrel amid the re-escalation of the Iran war and concerns about renewed inflationary pressure. Nick Twidale, chief market strategist at ATFX Global, said that breaching the $100 level would be 'a significant event' in the current scheme of things.
The Dow Jones Industrial Average opened lower again, down 0.33% in early trading, while the S&P 500 and Nasdaq Composite also fell. The ECB's decision to raise its key interest rate to 2.50% from 2.25% barely moved the region's stock markets and the euro.
The global selloff had pushed 30-year yields to their highest level since 2007, prompting Treasury Secretary Scott Bessent to announce increased buybacks of longer-dated bonds. Matt Simpson, senior market analyst at StoneX, said that Bessent 'may win a battle or two, but he'll only win the war if bond traders let him'.