Markets Recover Amid Inflation Fears and Oil Price Surge

Global markets showed signs of recovery on Friday as investors digested rising inflation fears and higher oil prices. The Brent crude price slipped 3% to $97.69 a barrel, after surging 7% overnight to a two-month high of $102.

The Middle East conflict continues to stoke concerns about supply disruptions, with attacks on Saudi tankers in the Red Sea risking a second crucial artery for global oil supplies. US President Donald Trump threatened 'major military punishment' for Iran and its allies.

Despite these concerns, the pan-European STOXX 600 rose 0.3% after a more than 1% drop in the last session. Stock index futures on Wall Street also pointed to a slight rebound after Thursday's weakness.

The dollar has been gaining strength, driven by growing expectations for the Federal Reserve to raise interest rates. Markets show traders believe central banks are more likely to raise borrowing costs, with a one-in-three chance of a rate hike from the Fed as soon as next week.