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July 8, 2026 - 15:57
4 minutes
(Bloomberg) — A flare-up in geopolitical risks drove stocks lower, bond yields rose and oil climbed as President Donald Trump said a ceasefire with Iran may be over, noting the US would probably launch further strikes.From New York to London and Tokyo, equities retreated. Almost 400 shares in the S&P 500 dropped, though chipmakers bounced. The renewed hostilities in the Persian Gulf threatened a fresh wave of disruption for energy markets, lifting crude prices by about 5%. That has stoked inflation worries, with money markets increasing their bets that the Federal Reserve will boost interest rates by October. Bitcoin sank.“We hit them very hard last night,” Trump said Wednesday on the sidelines of the NATO summit in Ankara, Turkey. “Probably hit them hard again tonight.”Trump spoke hours after the US launched strikes on Iran and revoked a waiver that allowed Tehran to sell its oil globally, measures Washington said were in response to attacks on ships in the Strait of Hormuz that it blamed on the Islamic Republic. The moves posed the greatest threat yet to a ceasefire deal between the US and Iran and talks toward a broader agreement to end the war.“Markets weren’t initially taking the re-escalation in US-Iran tensions too seriously earlier this week,” said Fawad Razaqzada at Forex.com. “But today, that seems to have changed.”Veteran strategist Ed Yardeni said the rupture in the ceasefire between the US and Iran risks sparking a fresh acceleration in price growth, which in turn could compel the Fed to raise interest rates.“Inflation concerns are back in play and as a result of that, the Fed is back in play,” Yardeni said Wednesday on Bloomberg Television’s Surveillance. “Not only has the Fed pivoted to tightening, but they may actually have to tighten.”While the market moves are not as pronounced as they were when the war began initially, the reaction is a stark reminder that geopolitical tensions remain front and center, according to Robert Edwards at Edwards Asset Management.“Lately, stocks have looked through the Iran war and we expect that dynamic to continue,” he said. “Saber rattling isn’t enough to move stocks in a meaningful way, but if there is a prolonged conflict that involves other countries beyond the US, which I believe is not currently priced into markets, then it’s possible for the market to correct.”He also noted that any stock market correction in the near-term is healthy, and would take a bit of steam out of the speculative fever seen in the semiconductor and memory stocks. A pullback would be an attractive set up going into this next earnings season, which starts in one week, he added.Corporate Highlights:Apple Inc., following through on a pledge to boost spending on US-made components, said its expanded agreement with Broadcom Inc. is expected to top $30 billion. After losing roughly $1 trillion in market value in less than two months, Nvidia Corp.’s stock is the cheapest it’s been since before the AI boom kicked off and sent the shares into the stratosphere. OpenAI is set to release its most advanced model widely on Thursday and is expanding its preview globally, the company said. ExxonMobil Holdings Corp. said second-quarter earnings jumped by almost $4 billion as the Iran conflict boosted oil prices. Estee Lauder Cos. sees its restructuring efforts adding up to as much as $1.75 billion in cumulative charges as the cosmetics conglomerate looks to improve efficiency and bolster results. Some of the main moves in markets:StocksThe S&P 500 fell 0.6% as of 9:55 a.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average fell 1.1% The Stoxx Europe 600 fell 1.1% The MSCI World Index fell 0.8% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1409 The British pound was little changed at $1.3368 The Japanese yen fell 0.3% to 162.55 per dollar CryptocurrenciesBitcoin fell 3.2% to $61,616.3 Ether fell 2.9% to $1,731.72 BondsThe yield on 10-year Treasuries advanced three basis points to 4.58% Germany’s 10-year yield advanced seven basis points to 3.07% Britain’s 10-year yield advanced nine basis points to 4.94% CommoditiesWest Texas Intermediate crude rose 4.6% to $73.66 a barrel Spot gold fell 0.9% to $4,070.26 an ounce ©2026 Bloomberg L.P.
