European natural gas prices surged to their highest level since early 2023, breaking above €75/MWh at the Dutch TTF hub, while Brent crude touched a five‑week peak of $97 a barrel. The spike followed renewed U.S. strikes against Iran on Tuesday, rekindling fears of a broader conflict that could disrupt supplies through the Strait of Hormuz. Mike Bell, head of market strategy at RBC Blue Bay Asset Management, warned that expectations of a quick resolution are fading, driving markets higher.

The rally rippled through global bonds: the 10‑year U.S. Treasury yield climbed to 4.81% — its highest since 2023 — German Bund yields rose to 3.37%, and U.K. gilt yields hit a post‑2008 high of 5.26%. Eurozone inflation accelerated to 3.3% in August, with energy costs up 14.3%. Mohit Kumar, chief European economist at Jefferies, said the firm is reducing exposure to riskier assets as higher oil prices threaten equities and credit.

S&P 500 futures pointed to further declines, while Japan’s Nikkei 225 fell 3% and South Korea’s Kospi dropped 3.8%.