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Oil prices moved higher on Wednesday while stock markets across Europe and the United States turned lower after U.S. President Donald Trump threatened Iran with renewed military action and accused Tehran of delaying negotiations with Washington.
Trump argued that Iran had taken "too long to negotiate a deal" aimed at ending hostilities between the two countries, adding that Tehran would "have to pay the price" after missing opportunities to reach an agreement.
Brent crude and West Texas Intermediate (WTI) both gained more than 1% following Trump's remarks, reaching $92.8 and $89.8 per barrel, respectively, as of 11:05 a.m. GMT, while European natural gas prices at the Dutch TTF hub rose 1.7% to €49.6 ($57.2) per megawatt-hour.
The comments rippled through financial markets, pushing European equities into negative territory after they opened the session with modest gains.
Pan-European Stoxx 600 fell more than 1%, alongside declines in Germany's DAX, France's CAC 40 and Spain's IBEX 35. The U.K.'s FTSE 100 lost 0.7%, while Türkiye's BIST 100 traded 0.8% lower and futures tied to major U.S. indexes dropped more than 1%.
At the same time, government bond yields moved higher as investors reassessed risk, with Germany's two-year yield rising 3 basis points to 2.71%, Italy's and France's equivalent yields climbing to 2.90% and 2.89%, respectively, and the benchmark 10-year U.S. Treasury yield adding 6.9 basis points to 4.546%.
Precious metals weakened further, with gold falling 2.5% to below $4,150 per ounce and silver losing nearly 3% to $63.5.
The reaction added to the risk-off mood that has prevailed since the conflict began, as continued disruptions to shipping traffic through the Strait of Hormuz raised concerns over higher energy costs and renewed inflationary pressures across the global economy, reinforcing expectations that interest rates will remain higher for longer.
Trump stepped up his criticism of Iran in a series of comments on Wednesday, arguing that Tehran had missed opportunities to reach an agreement with Washington.
"Iran's Military is a complete and total mess. Much of it, like their Navy and Air Force, doesn't even exist anymore. They have been completely defeated. Iran is all talk and no action," Trump wrote on his Truth Social platform. In a separate post, he added: "The Bully of the Middle East is DEAD!!! They've taken too long to negotiate a deal that would have been great for them, now they will have to pay the price!!!"
Trump also told Fox News that he was close to authorizing additional attacks targeting Iranian infrastructure, including power plants and bridges, arguing that Tehran had spent too much time negotiating.
Trump's remarks followed overnight military exchanges between U.S. and Iranian forces after several days of shifting tensions in the region. The latest developments came after Israel and Iran exchanged strikes before easing back from direct confrontation.
The U.S. Central Command (CENTCOM) announced that American fighter jets struck Iranian air defense systems and radar installations near the Strait of Hormuz after a U.S. Army Apache helicopter was shot down.
Iran's Islamic Revolutionary Guard Corps (IRGC) responded early Wednesday, announcing retaliatory attacks against 21 American military targets at U.S. air and naval bases across the region.
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