Public Markets 3d Briefing
×Market Turmoil
US stocks suffered their worst week since April as the Iran conflict sent oil prices surging and labor data disappointed. The Dow industrials fell 3% for the week, with investors rattled by the dual shocks of a weak jobs report and escalating Middle East tensions. Energy markets were particularly volatile, with crude oil hitting its highest level since 2024 amid fears of prolonged supply disruptions through the Strait of Hormuz.
Oil Price Shock
The Iran war has triggered a dramatic energy price shock bloomberg.com across Asia, with import-dependent economies feeling immediate pain. Thai farmers bloomberg.com raced for diesel supplies while Indian refinery executives monitored Persian Gulf developments through the night. Colombia's local debt bloomberg.com rallied on the oil surge, converting from the worst-performing emerging market debt to the leading gainer as higher crude prices boosted the nation's main export.
Fed Policy Uncertainty
Bond traders are increasing bets bloomberg.com that the Federal Reserve will forgo any rate cuts this year as Middle East conflict pushes up inflation expectations. Cleveland Fed President Beth Hammack bloomberg.com warned of two-sided risks to rates, while Treasury Secretary Scott Bessent bloomberg.com suggested the US may lift sanctions on more Russian oil following moves to green-light Indian purchases. The weak February payrolls report bloomberg.com showing 92,000 jobs lost has complicated the Fed's path forward.
Global Economic Strains
The economic fallout from the Iran war is spreading beyond the region, with European Central Bank officials facing mounting pressure as markets price in potential rate hikes. European energy fears ft.com are pushing coal consumption higher as a protracted Middle East conflict dents expectations for declining global coal use. India faces sweltering summer nights bloomberg.com as the conflict crimps natural gas supplies needed for electricity generation.
Corporate and Market Moves
Vertiv Holdings bloomberg.com, Lumentum Holdings, Coherent Corp, and Echo Star Corp will join the S&P 500 in the latest quarterly rebalance, with Vertiv and EchoStar investing.com leading a tech surge. KKR & Co bloomberg.com is acquiring a $235 million stake in South Korean renewable energy firm SK Eternix, underscoring appetite for climate investments despite market turmoil. BlackRock ft.com has limited redemptions at its private credit fund after withdrawal requests surged to 9.3% of net asset value.
Asia Market Resilience
Chinese markets bloomberg.com have weathered the Iran war turmoil better than their Asian peers, with the yuan funding hitting record $200 billion as China's ambitions to internationalize its currency bear fruit. Japan's investors bloomberg.com sold the largest amount of overseas bonds since 2024 last month, as market watchers scrutinize flows for signs that higher domestic yields are triggering repatriation.
Trade and Supply Chain Disruptions
The closure of the Strait of Hormuz and airspace across the Gulf has rippled through the global economy, pushing up oil and fertilizer prices. The Trump administration announced a $20 billion reinsurance program bloomberg.com aimed at reviving shipping in the Strait of Hormuz, where traffic has all but stopped amid US and Israeli attacks on Iran. Emirates investing.com briefly froze all Dubai flights "until further notice" after airport blasts before resuming operations.
Gold and Safe Haven Assets
Gold declined bloomberg.com as a strong dollar and Fed outlook outweighed war premium, though China's central bank extended its gold-buying streak to 16 months amid Middle East turmoil. Spot gold investing.com was set for a weekly loss after soft jobs data weighed on the dollar, highlighting the complex dynamics between geopolitical risk, monetary policy, and precious metals markets.