Stocks declined and oil prices jumped as conflict in the Middle East jolted global markets, triggering a retreat from risk assets.
Gold and the dollar rose in haven demand. Asian shares fell 1.5%, while the S&P 500 Index futures dropped almost 1%. Markets remained volatile amid conflicting reports on discussions between Iran and the US. Treasuries flipped from gains to losses after the Wall Street Journal reported Iran made a fresh push to resume nuclear talks with the US.
Iran’s national security chief Ali Larijani, however, said the country won’t negotiate. Some of the steepest moves eased in oil, where an initial knee-jerk reaction saw Brent surge as much as 13%.
The commodity pared some of those gains to trade at $77.53 a barrel, still up 6.4%. Traders remained focused on the status of the Strait of Hormuz — which is effectively closed now — as the waterway is crucial for the flow of oil to the rest of the world.
Futures contracts indicated European shares were set for a weak open. As investors cut back on risk, some haven assets got a bid. Gold rose 1.4% to around $5,350 an ounce, after easing from session highs.
