Public Markets 8-Hour Briefing
×Market Turmoil Escalates
European stocks tumbled to one-month lows as the Middle East conflict dragged on, with oil surging above $85 a barrel and European natural gas prices almost doubling this week. US stock futures dropped 1.4% as the war in Iran entered its fourth day, heightening fears of a lengthy disruption to energy markets and a surge in inflation. Brent crude traded at its biggest premium to the Middle Eastern Dubai marker since 2022 after the global crude benchmark surged following attacks on Iran by the US and Israel.
Energy Crisis Deepens
Shell committed to inject 3.5 billion reais ($666 in Brazilian ethanol producer Raízen SA, a joint venture with Cosan SA. Qatar shut LNG production at the world's largest export facility after it was targeted in an Iranian drone attack, sending European gas prices surging more than 40% to the highest since 2023. Asian traders rushed to substitute supplies stranded in the Middle East as an intensifying regional conflict threatens access to sulfur used in fertilizer and nickel processing.
Inflation Fears Spike
The dollar headed for its biggest two-day rally in almost a year as the deepening war in Iran stoked inflation fears and spurred demand for havens. US Treasuries slumped for a second day as traders slashed bets on the extent of interest-rate cuts expected from the Federal Reserve this year. European bonds extended their selloff as turmoil in the Middle East drove up energy prices and a senior central banker warned that a prolonged conflict could bring stagflation to the euro zone.
Corporate Impact Spreads
Best Buy projected weak growth for the year ahead as it expects consumers to continue hunting for value, despite returning to positive same-store sales during fiscal 2026. On Holding said profit and sales climbed in the fourth quarter, but the running shoe maker's sales outlook for the current year underwhelmed investors. Beiersdorf shares fell 15% after disappointing 2026 outlook on cost and FX pressures, with the cosmetics company expecting slow sales this year, particularly in its consumer business segment.
Central Banks Respond
UK cuts bond sales to a three-year low as finances improve, while traders ditched bets on a second Bank of England cut as inflation fears spiral. The Czech central bank said economic growth is becoming more robust after a stronger-than-expected expansion last year. Ireland nominated Gabriel Makhlouf for a second term as head of the central bank.
Defense and Aerospace Surge
South Korean arms firm saw a 20% stock surge to record highs as Gulf unrest fuels demand, with a top executive citing threats in the Middle East. Thales beat profit forecasts on strong aerospace and defense performance. AeroVironment bounced 6.5% on Space Force contract talks.
Tech Sector Under Pressure
Software stocks saw shorts at the highest level since the GFC, according to Deutsche Bank, as investors weighed the implications of the OpenAI $110 billion funding round. MongoDB was downgraded by Baird on Atlas growth concerns and AI revenue timing. Pinterest jumped 10% on a $1 billion Elliott investment and buyback plan.
Emerging Markets Hit
Emerging-market assets extended losses as the war in Iran impedes a key route for global energy supplies, lifts the dollar and forces investors to adjust to the risks of resurgent inflation. Egypt's pound briefly weakened past the milestone of 50 per dollar before paring some losses, signaling investors' fears over the prospect of a prolonged conflict in the Middle East. Indonesian petrochemical maker PT Chandra Asri Pacific declared force majeure, citing disruption to feedstock shipments through the Strait of Hormuz following the outbreak of the Iran war.
Logistics and Supply Chain Disruption
Kuehne + Nagel plans to cut more than 2,000 jobs as it tackles a glut of capacity in the transportation market, even as the war on Iran makes the global cargo outlook more unpredictable. A shortage of tankers in the Persian Gulf could hit oil production, with just a handful of supertankers still available for hire in the region, risking a logistical crisis that could force production shut-ins.