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July 8, 2026 - 18:03
5 minutes
(Bloomberg) — A flare-up in geopolitical risks drove stocks and bonds lower as oil jumped after 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 fell, though chipmakers stabilized after a selloff. The renewed hostilities in the Persian Gulf threatened a fresh wave of disruption for global energy trading, with Brent crude topping $80. That has reignited inflation worries, with money markets increasing their bets 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 that came in response to attacks on ships in the Strait of Hormuz. The president also noted that a blockade on Iranian ports could resume, raising concerns about a return to all-out 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.”“The latest exchange of military strikes in the Middle East supports our view that oil prices will be volatile over the coming months, and will face bouts of upward pressure,” said Hamad Hussain at Capital Economics. “That said, under the assumption that some form of a ceasefire ends up holding and oil flows continue to recover, we think Brent crude prices will settle close to current levels at the end of this year.”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.”The spike in oil prices and higher bond yields helped drive a near 10% equity correction in the first half of the year, but they also underscored the economy’s resilience to these shocks, according to Angelo Kourkafas at Edward Jones.“Renewed geopolitical risks may fuel some near-term risk-off sentiment, but we do not expect investors to react to this round of uncertainty in the same way,” he said. “Neither the US nor Iran appears inclined toward a prolonged conflict. It would likely take a much larger and sustained rise in oil prices to materially alter the outlook for the economy and corporate earnings.”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. Jeff Bezos’ Blue Origin LLC is embarking on its first external fundraising round, according to people familiar with the matter, seizing on the enthusiasm ginned up by archrival SpaceX’s record initial public offering. OpenAI is set to release its most advanced model widely on Thursday and is expanding its preview globally, the company said. 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. ExxonMobil Holdings Corp. said second-quarter earnings jumped by almost $4 billion as the Iran conflict boosted oil prices. What Bloomberg Strategists say…“Rising volatility in oil due to renewed US-Iran tensions will be a bigger headwind to risk sentiment than prices in the $70s.”—Michael Ball, Macro Strategist, Markets Live. For the full analysis, click here.Some of the main moves in markets:StocksThe S&P 500 fell 0.9% as of 12:02 p.m. New York time The Nasdaq 100 fell 0.9% The Dow Jones Industrial Average fell 1.5% The Stoxx Europe 600 fell 1.6% The MSCI World Index fell 1.1% CurrenciesThe Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.1% to $1.1396 The British pound was little changed at $1.3361 The Japanese yen fell 0.3% to 162.66 per dollar CryptocurrenciesBitcoin fell 3.1% to $61,693.05 Ether fell 3.4% to $1,723.17 BondsThe yield on 10-year Treasuries advanced four basis points to 4.59% Germany’s 10-year yield advanced 10 basis points to 3.09% Britain’s 10-year yield advanced 13 basis points to 4.97% CommoditiesWest Texas Intermediate crude rose 7.8% to $75.92 a barrel Spot gold fell 1.8% to $4,034.13 an ounce ©2026 Bloomberg L.P.
