Global Markets Under Pressure as Oil Surge and Geopolitical Tensions Drive Stagflation Concerns

Index Update:  ron, Nvidia, and Alphabet, while semiconductor weakness weighed heavily on broader sentiment. In contrast, energy stocks such as Exxon Mobil and ConocoPhillips gained alongside rising crude prices, and Clear Secure outperformed amid increased airport security demand.

Market Movers: On Thursday, the top gainers were EpicQuest Education Group International Limited (+209.15%) and Fitness Champs Holdings Limited (107.60%). On the contrary, Wave Life Sciences Ltd. (-49.59%) and TaskUs, Inc. (-37.60%) declined the most the same day.

Commodities Update: Crude oil prices surged sharply on Friday, with WTI rising above USD 95 per barrel and Brent approaching USD 110, marking their highest levels since mid-2022, driven by escalating geopolitical tensions between the U.S. and Iran and doubts over a near-term resolution. Reports of potential U.S. troop deployment and large-scale Iranian mobilization have heightened supply disruption concerns, particularly as Iran has effectively constrained flows through the Strait of Hormuz, a critical route for roughly one-fifth of global energy trade. Although diplomatic efforts continue—with a delayed strike deadline, ongoing negotiations, limited tanker movement, and plans to support insured shipping—oil prices remain significantly elevated, up about 40% for WTI and 50% for Brent since the conflict began. Gold rebounded above USD 4,400 per ounce and silver climbed to around USD 70 on Friday, recovering from sharp declines in the previous session as the U.S. delayed potential military action against Iran, easing immediate market fears. The postponement of the strike deadline to April 6 and limited tanker movement through the Strait of Hormuz provided short-term relief, although geopolitical uncertainty remains elevated after Iran rejected U.S. proposals and asserted control over the waterway. Despite the rebound, precious metals have faced volatility, as rising oil prices and prolonged conflict have intensified inflation concerns and strengthened expectations of potential interest rate hikes by major central banks.

Macro Updates: The U.S. dollar index hovered just below 100 on Friday after three consecutive gains, supported by rising geopolitical tensions in the Middle East and their impact on oil prices, inflation, and growth expectations. Reports of potential U.S. troop deployment and a delayed deadline for action against Iran, alongside limited tanker movement through the Strait of Hormuz, have sustained uncertainty and elevated energy prices. This backdrop has strengthened inflation concerns and shifted market expectations toward a more hawkish Federal Reserve stance, with investors now pricing in roughly a 50% probability of a rate hike by December instead of earlier expectations for rate cuts.

Bonds Commentary: The U.S. 10-year Treasury yield held near 4.41% on Friday, close to eight-month highs, as escalating Middle East tensions and rising oil prices reinforced inflation concerns and pressured bond markets. Reports of potential U.S. troop deployment, along with a delayed deadline for action against Iranian energy infrastructure and limited tanker movement through the Strait of Hormuz, have sustained geopolitical uncertainty. This environment has strengthened expectations of a more hawkish Federal Reserve stance, with markets now pricing in nearly a 50% probability of a rate hike by December, reversing earlier expectations for rate cuts.

Futures Update: U.S. stock futures edged slightly higher on Friday, with the Dow, S&P 500, and Nasdaq 100 each rising about 0.1%, as investors remained cautious after the U.S. extended Iran’s deadline to unblock the Strait of Hormuz until April 6, easing immediate escalation concerns while keeping geopolitical risks in focus.

After experiencing early pressure in the session, stocks declined further throughout Thursday's trading, closing sharply lower for the day. The significant losses pushed the Nasdaq and S&P 500 to their lowest closing levels since early September of last year. Despite the decline, the major averages finished the day just above their session lows. The S&P 500 rose by 114.72 points, or 1.74%, closing at 6,477.17. From a technical standpoint, the index faced resistance at key levels and drifted lower, indicating the potential for a near-term decline. The pattern of lower highs since late February suggests a developing corrective phase, while the recent bounce near the 6,500 level hints at emerging support but not yet a confirmed reversal. Moreover, the 21- and 50-day exponential moving averages (EMAs) are trending downward, reflecting a shift in momentum and acting as resistance levels. The 14-period RSI remains below the neutral point, signaling a negative bias. Key levels to monitor are support at 6,410 and resistance around 6,590.