Global Markets Stumble Amid Inflation Fears and Middle East Tensions
Global markets took a hit on Tuesday as investors grew concerned about potential inflation and ongoing conflict in the Middle East. The Dow Jones Industrial Average dipped 1.18%, while the S&P 500 dropped 0.58% and the Nasdaq Composite slipped 0.32%. MSCI's gauge of stocks across the globe was last down 0.55%.
The surge in bond yields to multi-year highs has put central banks under pressure to raise interest rates, exacerbating inflation concerns. The European Central Bank is set to raise euro zone rates by a quarter point on Thursday this week, and the Federal Reserve may reconsider its own rates after US inflation data is released on Friday.
Oil prices remained steady despite the market downturn, climbing 2.13% to USD 99.07 a barrel for Brent crude oil and 2.82% to USD 94.05 a barrel for US crude. The yen's surge, however, looms large for global markets as traders have borrowed it in earnest to fund purchases of higher-yielding assets.