Stocks and Bonds Tumble As US Crude Hits $110: Markets Wrap

Stocks and bonds fell as oil surged anew, with President Donald Trump dashing optimism that the war in the Middle East is nearing a swift resolution and that disruptions to energy flows will ease.

Nasdaq 100 contracts slumped 2.1% amid a premarket selloff in big tech stocks and chipmakers. S&P 500 futures dropped 1.7%. West Texas Intermediate jumped 10% to more than $110 a barrel after Trump used a prime-time address to pledge more aggressive action against Iran and offered no concrete plans to reopen the Strait of Hormuz. European diesel futures hit $200 a barrel.

Bonds tumbled as expectations that oil prices will stay higher for longer prompted traders to initiate fresh bets on tighter monetary policy. The dollar advance the most in a week while gold snapped a four-day streak of gains.

“This market just isn’t manageable,” said Laurent Lamagnere, deputy chief executive officer at Alphavalue in Paris. “We’re really concerned about second-round effects, not only on oil prices but also on oil supply, for example, airlines trimming destinations with harsh consequences for tourism.”

Optimism had been building for days that Trump was seeking a quick off-ramp to the war. Instead, his Wednesday speech offered no clear timeline or breakthroughs on ending the conflict, which has already roiled financial markets and pushed some equity gauges into correction territory.

Oil “has rarely dipped below $100 per barrel since its initial surge,” said Russ Mould, investment director at AJ Bell. “This may be a better indicator of where we are than the latest movements in global indices, as the world is forced to confront a situation where around 20% of the world’s supply is disrupted.”

Shares in oil and gas companies such as Venture Global Inc. and Exxon Mobil Corp. rebounded in US premarket trading. Travel and mining and semiconductor stocks fell. Nvidia Corp. slumped 3%.

Treasury yields rose across the curve, with the two-year rate up three basis points to 3.83% as traders cut the odds of a 2026 Federal Reserve rate cut to about 10% from more than 20%. Money markets again fully price in two quarter-point hikes by the Bank of England and three by the European Central Bank for the year.

Damage caused by the war will continue to have a negative impact on the global economy even if hostilities end soon, ECB Governing Council member Fabio Panetta said.

Traders are likely to trim their stock holdings ahead of the long weekend, with many markets closed for as long as four days. Since the conflict began, the S&P 500 has posted cumulative gains over the first three days of the week but cratered 9%, all told, on Thursdays and Fridays.

For Mabrouk Chetouane, global head of market strategies at Natixis IM Solutions, there is little sense in buying protection or hedging positions ahead of the break as events could go either way.

“The outcome is completely binary, it’s 50/50 between escalation and de-escalation,” Chetouane said. “The best choice is just to keep a cool head and maintain our allocation, it’s the most reasonable thing to do.”

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Some of the main moves in markets:

Stocks