Live updates: Follow the latest news on US-Iran war
Global markets were volatile on Thursday as oil prices climbed sharply, equities retreated and precious metals weakened, reflecting investor unease over the war in the Middle East.
This took place after US President Donald Trump said on Wednesday that Washington will hit Iran "extremely hard" in the next two to three weeks sending the country back into the "Stone Ages".
Crude prices rose strongly after reversing earlier losses, with Brent crude climbing nearly 6 per cent to about $107 per barrel, while US West Texas Intermediate also gained more than 5 per cent to trade above $105 by 9:23am UAE time on Thursday.
The rebound followed signals that military action linked to the Iran conflict could continue without a clear timeline, unsettling expectations of a de-escalation.
The rally in oil highlights persistent concerns about supply disruptions, particularly around key transit routes such as the Strait of Hormuz, through which a significant share of global energy exports flows. Heightened risks to shipping and infrastructure have added a geopolitical premium to crude markets, amplifying price swings in recent sessions.
Equity markets, meanwhile, moved lower as investors shifted towards defensive positions. Global stock indices declined, with US futures down about 1 per cent and European markets falling more than 1.5 per cent. Asian benchmarks also recorded losses, with Japan’s Nikkei and South Korea’s Kospi dropping. The reaction reflects growing concerns over inflationary pressures and slower economic growth, as higher energy costs weigh on corporate margins and consumer spending.
Currency markets echoed the cautious mood, with the dollar strengthening as investors sought safe-haven assets. Rising bond yields also pointed to expectations that central banks may need to keep interest rates elevated for longer, limiting the scope for monetary easing.
In commodities, gold prices fell about 2 per cent, retreating from recent highs to around $4,665 per ounce. The decline came as a stronger dollar and higher Treasury yields reduced the appeal of non-yielding assets such as bullion. Other precious metals also weakened, with silver, platinum and palladium all posting losses.
The latest moves mark a sharp reversal from earlier in the week, when hopes of easing tensions had lifted equities and pushed oil prices lower. However, the absence of clear progress towards resolving the conflict has reignited volatility across asset classes.
Market participants are now closely watching geopolitical developments, as well as signals from policymakers, for direction. With energy markets remaining sensitive to supply risks and financial markets reacting swiftly to shifts in sentiment, analysts expect continued turbulence in the near term.
