Global Stocks Plummet as Oil Prices and Inflation Concerns Rise

Global stock markets fell on Tuesday, August 18, amid rising concerns over inflation and higher energy prices. The US-Iran truce expired without any progress towards reopening the Strait of Hormuz, fueling fears that crude oil prices will remain elevated. This, in turn, is expected to drive up inflation, leading to a sharp rise in government bond yields.

The 10-year US Treasury yield reached its highest level since June 2007, exceeding 4.70 per cent. Neil Wilson, investor strategist at Saxo UK, noted that this increase 'may pose a threat to equity valuations' and make it harder for deeply indebted nations and policymakers.

European borrowing costs surged, with the 10-year French government bond yield reaching its highest level since 2008. New York's three main indices fell for a third consecutive session, with the tech-heavy Nasdaq dropping around 1.3 per cent. BP shares rose nearly 3 per cent and Shell increased by almost 2 per cent, supporting London's main index.