Thursday’s trading session on global stock exchanges was marked by sharp declines. Investors reacted nervously to President Donald Trump’s lack of specific declarations regarding the end of the Middle East conflict. Consequently, oil prices surged past the $100 mark, and the U.S. dollar strengthened its position.
Lack of Timeline Fuels Uncertainty
During a prime-time address, Donald Trump announced that the U.S. would strike Iran „extremely hard” in the coming weeks. Although the President claimed military objectives were nearing completion, he provided no specific withdrawal dates. This uncertainty hit the markets hard—the price of June Brent crude jumped over 6%, reaching $107.69 per barrel.
Investors were particularly concerned by the lack of clarity regarding the Strait of Hormuz. This strategic shipping route remains blocked, severely impacting Asian economies. Trump stated only that the U.S. does not need the waterway and that it would reopen „naturally” once the fighting subsides.
Stock Markets Under Pressure
The market reaction was immediate:
- USA & Europe: U.S. index futures fell 1.3%, while European futures lost over 2%.
- Asia: The sharpest declines were seen in South Korea (Kospi down 4.7%) and Japan (Nikkei down 2.4%).
- Region: The broad MSCI Asia-Pacific index (ex-Japan) shrank by more than 2%.
The Return of Stagflation Fears
Experts emphasize that the market was looking for signs of de-escalation to halt the March turbulence caused by rising energy costs.
„We have no additional certainty around the timeline, and this is what the market was looking for,” commented Jon Withaar of Pictet Asset Management.
Prashant Newnaha of TD Securities noted that Trump’s rhetoric revived concerns about stagflation—the dangerous combination of high inflation and economic slowdown. In Asia, 10-year Treasury yields rose to 4.376%, suggesting investors are abandoning hopes for easier monetary policy amid rising price pressures.
Currencies and Bonds
Amid the chaos, the U.S. dollar once again became the „safe haven.” The dollar index rose 0.5% to 100.05, recovering previous losses. The Euro weakened by 0.5% to $1.1533. Analysts predict that the upcoming long weekend will prompt investors to further reduce risky assets due to fears of prolonged fuel supply disruptions.
