Global Markets Update: Middle East Tensions Shake Equities, Lift Oil and Gold

Image Source : Krish Capital Pty Ltd

Index Update: U.S. markets saw a risk-off tone as Israel’s strike on Iran heightened geopolitical tensions, weighing on airline and megacap tech stocks, while boosting oil and defense shares. Despite the volatility, major indexes are still on course for modest weekly gains, with the S&P 500, Nasdaq, and Dow all slightly higher for the week.

Market Movers: On Thursday, the top gainers were Liminatus Pharma, Inc. (+82.81%), followed by UroGen Pharma Ltd. (+51.78%). On the contrary XCF Global, Inc (-33.18%) and Mullen Automotive, Inc (- 32.57%) declined the most the same day.

Commodities Update: Oil prices surged to their highest levels since February, driven by fears of supply disruptions following Israel’s strike on Iran, which raised the risk of a broader Middle East conflict and potential disruption of the vital Strait of Hormuz. WTI and Brent crude futures both spiked before settling lower, while falling U.S. crude inventories and expectations of Fed rate cuts further supported prices. Oil is on track for its strongest weekly gain since early 2022. Gold prices climbed over 1% toward record highs as investors flocked to safe-haven assets amid escalating geopolitical tensions and uncertainty over U.S. trade policy. The jump followed Israel’s strike on Iran’s nuclear program, intensifying concerns of retaliation and regional conflict, while softer U.S. inflation data bolstered hopes of more Fed rate cuts, adding to gold’s appeal.

Macro Update: The U.S. 10-year Treasury yield rebounded to around 4.37% after briefly hitting a one-month low, as investors reacted to escalating Middle East tensions following Israel’s strike on Iran. Strong demand at a recent 30-year Treasury auction provided some support to the bond market, which remains under pressure from trade uncertainty, fiscal concerns, and a recent credit rating downgrade. Attention now turns to the Fed’s upcoming policy decision, with markets expecting no rate change but anticipating two cuts later in 2025 due to softer inflation data.

Futures Update: U.S. stock futures dropped sharply after a major Israeli airstrike on Iran heightened geopolitical tensions, driving oil prices higher and raising concerns about global economic growth. Dow Jones, S&P 500, and Nasdaq futures all recorded significant declines. This comes after Wall Street indices had recently closed slightly higher, with the S&P 500 approaching its record high. Global markets had been rallying, supported by optimism that President Trump’s tariff policies might be less severe than initially anticipated.

Stocks recovered from an early decline to trend higher throughout Thursday’s trading session. The S&P 500 fell by 23 points, or 0.38%, closing at 6,045.25. From a technical analysis standpoint, the index is currently near a confluence zone and has formed a bearish candle on the daily chart, indicating a potential mild correction in the coming days. However, the index remains above its key exponential moving averages, which supports a positive outlook and suggests these levels could act as near-term support. The primary support level is around 5,888, while resistance is expected near 6,066.