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Oil prices extended their gains Wednesday after rising more than 5% in the previous session as renewed U.S-Iran exchanges of fire fuel inflation concerns and weigh on global markets.
International benchmark Brent crude reached $96.7 per barrel, while U.S. benchmark West Texas Intermediate neared $92 before giving back some of its gains.
Equities also came under pressure across major markets. Japan’s Nikkei 225 fell 2.9%, while South Korea’s Kospi dropped 4%.
China’s Shanghai Composite lost 1% and Hong Kong’s Hang Seng declined 0.4%. In Europe, the Stoxx Europe 600 fell 0.2% after the open, while Germany’s DAX 30 declined 0.3%. The U.K.’s FTSE 100, France’s CAC 40 and Spain’s IBEX 35 each slipped 0.1%.
Borsa Istanbul also traded 0.8% lower, while futures linked to major U.S. indexes fell, with the tech-heavy Nasdaq down 0.3%.
Gold extended its losing streak, falling 0.1% to around $4,330, while silver gained 0.1% to $64.2 per ounce. Palladium and platinum each dropped around 0.1% to $1,300 and $1,735 per ounce, respectively.
Cryptocurrencies also moved lower, with bitcoin down 1.5% to $77,600 and ethereum falling 2%.
The market moves followed a U.S. Central Command announcement Tuesday that American forces had struck Islamic Revolutionary Guard Corps targets in Iran near the Strait of Hormuz.
Iran reported that the attack hit a residential area in Kuhehstek in Sirik County, killing four people, including a child, and injuring around 70 others.
The Islamic Revolutionary Guard Corps (IRGC) claimed Wednesday that they struck the command post and accommodation of a U.S. commander at Ali Al Salem Air Base in Kuwait, killing some U.S. personnel and destroying drones and facilities. The Iranian army also reported attacks on Jordan, Bahrain and Erbil in northern Iraq.
Rising tensions around the Strait of Hormuz pushed energy prices higher and raised inflation concerns, while bond yields in major markets stayed elevated at their multi-year highs.
The yield on Britain’s 10-year bonds jumped 4 basis points, or 0.04 of a percentage point, to 5.268%, its highest level since June 2008.
The U.S. 30-year Treasury yield hovered around 5.284%, its highest level since 2007. Japan’s 10-year bond yield reached a 30-year high of 3.014%, while the yen slipped to around 159.66 against the U.S. dollar after trading above 160.
Investors were also preparing for key jobs and inflation data due over the following week, which could influence whether the Federal Reserve raises interest rates at its next meeting in two weeks.
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