Oil price swings drive global stock markets as Brent briefly tops USD 119

Oil price swings drove a volatile session for global markets on Thursday. Shares fell across Europe and Asia after crude spiked early. US stocks then trimmed declines as oil retreated during the day. The moves added to concerns that the war with Iran could shape inflation and growth.

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Brent crude briefly jumped above USD 119 per barrel in early trading. That level was far above roughly USD 70 before the war with Iran began. The surge followed intensified attacks by Iran on oil and gas facilities around the Persian Gulf. Investors feared longer supply losses in the region.

Oil prices and stock markets react to Persian Gulf risk

Japan’s stock index fell 3.4 per cent, while Germany dropped 2.8 per cent. South Korea declined 2.7 per cent as energy worries spread. As trading continued, oil gave up much of its rise. The pullback helped reduce pressure on equities later in the session.

Brent settled at USD 108.65, up 1.2 per cent from the prior day. Prices then eased further after the close. Benchmark US crude briefly topped USD 101 before settling at USD 96.14. It later fell towards USD 94. These shifts extended the hour-to-hour swings seen since the war started.

Wall Street declines stayed smaller than in Europe and Asia. US firms are less dependent on Middle East oil supplies. The S&P 500 ended down 0.3 per cent after an early 1 per cent drop. It briefly moved into the green in the final hour. The Dow fell 0.4 per cent, and the Nasdaq slipped 0.3 per cent.

Oil prices and Federal Reserve bets shift with inflation fears

Traders reduced expectations for US interest rate cuts as oil stayed elevated. Before the war, markets widely expected several reductions this year. Higher energy costs raised worries about inflation returning faster. The Federal Reserve held rates on Wednesday. Traders read Chair Jerome Powell’s comments as discouraging for cuts in 2026.

Markets now price a 73 per cent chance that the Fed holds steady this year. Some bets even include a possible increase, according to CME Group data. A month earlier, traders had seen a 74 per cent probability of at least two cuts. Policy decisions abroad also stayed unchanged on Thursday.

The Bank of Japan, the European Central Bank and the Bank of England held rates steady. Bond markets also swung as oil moved. The two-year US Treasury yield rose to 3.96 per cent early. It later slipped to 3.79 per cent, a large move for that market. The 10-year yield held at 4.26 per cent.

Oil prices and Treasury yields hit housing and metals

Higher yields had already pushed up mortgage and loan rates. A Thursday report showed sales of new US homes unexpectedly weakened in January. Yields remained above the 3.97 per cent level from before the war began. Rising yields also weighed on investment prices across assets.

Gold dropped 5.9 per cent to settle at USD 4,605.70 per ounce. Silver sank 8.2 per cent, falling even more than gold. Mining shares took heavy losses on Wall Street. Newmont slid 6.9 per cent, and Freeport-McMoRan fell 3.3 per cent during the session.

Micron Technology fell 3.8 per cent despite reporting stronger profit and revenue than analysts expected. The stock gave back some gains after a strong run. It entered the day up nearly 62 per cent for the year. The rise had been supported by a global shortage of computer memory.

Oil prices and corporate news move US stocks

Rivian Automotive rose 3.8 per cent, helping to limit broader losses. The company said Uber will invest up to USD 1.25 billion. Uber also expects to buy 10,000 autonomous robotaxis under the partnership. Uber Technologies shares fell 1.7 per cent even after the announcement.

Geopolitical steps aimed to cool oil’s surge, but markets viewed many as temporary. Investors focused on risks to oil and gas fields around the Gulf. Attention also stayed on the Strait of Hormuz off Iran’s coast. Roughly a fifth of the world’s oil usually passes through the route.

Late on Thursday, Israeli Prime Minister Benjamin Netanyahu said his country will hold off on any further attacks on the Iranian gas field, at Trumps request. Uncertainty remained high as the war neared its third week. Traders continued to watch oil, bond yields and equities for signs of easing risk.

Major US indexes still ended lower overall. The S&P 500 fell 18.21 points to 6,606.49. The Dow Jones Industrial Average dropped 203.72 to 46,021.43. The Nasdaq composite sank 61.73 to 22,090.69. The day’s pattern showed markets stayed closely tied to oil prices.

With inputs from PTI