Global Markets Face Pressure Amid Rising Geopolitical and Inflation Concerns

index Update

US stocks declined sharply on Friday as investors grew increasingly concerned that the prolonged conflict with Iran and rising energy prices could intensify inflationary pressures and keep interest rates elevated for longer. The S&Amp;P 500 fell 1.2%, while the Nasdaq Composite and Dow Jones declined 1.5% and 1.1%, respectively. Technology stocks led the pullback as investors booked profits following strong recent gains, with Intel, AMD, Micron Technology, Nvidia, and Cerebras Systems posting notable losses. Microsoft outperformed the broader market, gaining 4% after Pershing Square disclosed a position in the company. Meanwhile, Boeing shares extended their decline as investors reacted cautiously to Trump’s announcement regarding China’s agreement to purchase 200 Boeing aircraft, viewing the order as only modestly above prior expectations.

Market Movers

Among the session’s top gainers, P3 Health Partners surged 180.15%, while Super League Enterprise advanced 48.40%. On the downside, LanzaTech Global declined 43.27%, and Gambling.com Group dropped 42.03%, making them the weakest performers of the Trading session.

Commodities Update

Oil markets remained highly volatile on Monday as WTI crude briefly surged above $108 per barrel and Brent climbed past $111 before easing, amid reports that the US may temporarily ease sanctions on Iranian oil exports while broader Middle East tensions continued to escalate. Despite ongoing diplomatic discussions between Tehran and Washington through Pakistan, uncertainty remained elevated due to the continued disruption in the Strait of Hormuz, the blockade of Iranian ports, and fresh attacks on energy infrastructure across the Persian Gulf, including a nuclear Facility in the UAE. Meanwhile, precious metals weakened sharply as rising energy-driven Inflation concerns boosted expectations for tighter global Monetary Policy. Gold slipped below $4,550 an ounce after last week’s steep decline, while silver extended losses for a third consecutive session below $76 an ounce, pressured by a stronger US dollar, rising Treasury yields, hotter-than-expected US inflation data, and growing expectations that the Federal Reserve may keep rates elevated or potentially hike rates again before year-end. Silver sentiment was further dampened after UBS lowered its global Investment Demand outlook and projected a significantly narrower Supply Deficit amid softer industrial demand and improving mine supply.

Macro Updates

Dollar Holds Near Multi-Month Highs Amid Inflation and Geopolitical Risks

The US Dollar Index remained broadly steady near 99.2 on Monday, hovering around its highest levels since early April as persistent inflation concerns and escalating Middle East tensions continued to support safe-haven demand. Investors remained focused on the ongoing regional conflict and the expected prolonged closure of the Strait of Hormuz, which has kept oil prices elevated and intensified fears of renewed global inflationary pressure. The surge in energy prices has reduced expectations for monetary policy easing, with markets now anticipating that the Federal Reserve will keep interest rates unchanged through year-end, while the probability of an additional 25-basis-point rate hike has increased to roughly 40%

Bonds Commentary

The Yield on the US 10-year Treasury note rose to around 4.63% on Monday, marking its highest level since January 2025, as escalating inflation concerns linked to the Middle East conflict strengthened expectations that the Federal Reserve may raise interest rates later this year. Rising energy prices and continued disruptions surrounding the Strait of Hormuz have intensified inflationary pressures, while recent US CPI and PPI data reinforced concerns that higher energy costs are feeding into broader price growth across the economy. Investor sentiment was further shaped by President Donald Trump’s warning to Iran following unsuccessful diplomatic developments tied to regional tensions and trade discussions. Markets have now fully ruled out Federal Reserve rate cuts in 2026 and are increasingly pricing in the possibility of a rate hike before year-end, with attention turning toward upcoming FOMC meeting minutes and flash US PMI data for further policy and economic guidance.

Futures Update

US Equity futures moved lower on Monday, extending last week’s retreat from record highs as rising macroeconomic concerns outweighed continued enthusiasm surrounding AI-related stocks. Futures linked to the S&P 500, Nasdaq, and Dow Jones declined around 0.5%, pressured by elevated bond yields amid persistent Middle East tensions and expectations of prolonged disruptions to regional energy exports. The inflationary implications of higher energy prices reinforced expectations that the Federal Reserve will maintain restrictive interest rates despite incoming Chair Kevin Warsh’s preference for lower rates. Major AI hyperscalers including Tesla, Meta, and Alphabet traded lower in premarket activity, while AI infrastructure stocks showed mixed performance, with Nvidia gaining ahead of its upcoming Earnings release and AMD and Broadcom trading weaker.

After the prior session’s strength, stocks reversed sharply on Friday, with the major averages posting notable losses and ending the day well off their intraday lows but still decisively negative. Despite the pullback, the S&P 500 maintains a mildly stretched yet overall bullish intraday structure, holding comfortably above the rising EMA21 (~7,247) and EMA50 (~7,057), which underscores solid underlying momentum. The index is consolidating near recent highs following an extended rally, while RSI around 66—down from overbought levels—indicates cooling momentum rather than a trend Reversal. The near-term bias remains constructive as long as support in the 7,350–7,400 range holds, with dips likely to attract buyers, although a period of consolidation or mild mean reversion appears likely before the next upward move.