Oil Prices Briefly Surge, Stocks Slide on Iran Blasts

On Friday, claims surfaced that Israel had launched retaliatory attacks against Iran, which caused oil prices to briefly jump and global markets to fall. This prompted investors to seek out safer alternatives, like gold.

U.S. media cited Iranian authorities as suggesting Israel launched retaliatory strikes against Iran’s archrival, while Iranian state media reported explosions in the central province of Isfahan on Friday.

“The breaking news of a retaliatory attack on Iran by Israel had a disproportionate impact on Asian markets, leading to a precipitous decline in Dow futures and additional price increases for gold and oil,” observed Richard Hunter, head of markets at Interactive Investor.

“The key indices, which were already preparing for a weekly decline, will be further pressured by the escalation, and US markets won’t have a chance to respond immediately to the developments until later.”

After momentarily surging by four percent on concerns about supplies from the oil-rich region, crude oil prices fell.

In addition to the Swiss franc and US government bonds gaining support, the yen rallied against the dollar and gold jumped back above $2,400 per ounce as a result of the flight to safety.

Iran launched hundreds of missiles and drones at Israel about a week ago in revenge for a deadly strike that demolished Iran’s consular annexe at its embassy in Syria; Tehran blamed the strike on its enemy. Israel had warned that it would strike back.

Israeli and Palestinian terrorists supported by Iran are at war in Gaza, and fears of a huge regional spillover have already skyrocketed. Friday saw a reiteration of calls for de-escalation from world leaders.

Neither Israeli nor Iranian authorities had responded, and it was yet unknown how bad the damage was.

Following data indicating jobless claims came in below estimates but an indicator of corporate activity touched a two-year high, traders were already in a pessimistic mood as they considered the possibility of the Federal Reserve remaining neutral on US interest rates this year.

Inflation is “too high” according to Atlanta Fed chief Raphael Bostic, who also stated that he does not think it is necessary to reduce borrowing prices until later in the year.

Both Governor Michelle Bowman and Chief John Williams of the New York Federal Reserve both noted that they did not observe as many reductions as anticipated this year.

At $82.26/bbl, West Texas Intermediate is down 0.6%.

Imports of Brent North Sea Crude fell 0.5% to $86.65/bbl.

The London Stock Exchange’s FTSE 100 index rises 0.2% to 7,864.67 points

In Paris, the CAC 40 index is up 0.4% at 8,015.39

At 17,777.20, Frankfurt – DAX: FLAT

At 4,932.66 points, the EURO STOXX 50 is up 0.4%.

The Tokyo-Nikkei 225 fell 2.7% to 37,068.35 points at the market close.

The Hong Kong Hang Seng Index closed at 16,224.14, down 1.0 percent.

Shanghai – Composite: 3,065.26 (close)—a decrease of 0.3%

The New York Stock Exchange (Dow) closed at 37,775.38 points, up 0.1%.

From Thursday’s level of 154.67 yen, the dollar/yen has fallen to 154.52 yen.

Up from $1.0645, the euro/dollar is now trading at $1.0650.

GBP/USD: DOWN from $1.2438 to $1.2435

From 85.57 pence to 85.62 pence, the euro/pound rate has gone up.

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