Brent crude oil settled at $100.69 per barrel, marking a significant increase following claims by Yemen's Houthis of attacks on Saudi oil tankers, which raises concerns about supply disruptions in the region. This spike in oil prices has reignited inflation fears, leading to a sell-off in bonds, with the 10-year Treasury yield reaching 4.7%, the highest since January 2025.
The stock market reacted negatively, with the S&P 500 and Nasdaq experiencing their worst one-day performances since June, dropping 1.2% and 2.2%, respectively. The Dow Jones also fell around 1%, continuing a trend of losses. Additionally, President Trump has indicated that the U.S. will hold Iran accountable for further attacks, which could escalate military tensions.
In the backdrop, the European Central Bank is preparing for potential rate hikes due to rising inflation risks linked to oil prices. Meanwhile, the tech sector is facing scrutiny over AI spending, with Alphabet and Tesla's shares declining sharply, while Intel reported strong revenue growth, boosting its stock.
The article also mentions new tariffs imposed by the Trump administration on various countries over forced-labor violations, further complicating the economic landscape