As the Middle East’s escalating turmoil fueled an increase in energy costs and increased market concerns about inflation, a selloff in stocks and government bonds deepened on Tuesday while the dollar rose. US S&P 500 e-mini futures were down 1.4%, while Nasdaq e-mini futures were down 1.8%, indicating that the selloff would eventually engulf Wall Street after Monday’s turbulent session, which saw the Nasdaq Composite rise 0.4% and the S&P 500 bounce from an early fall to close flat.
After dropping 1.7% on Monday, the European stock exchange’s STOXX 600 tumbled as high as 3.6% in morning trade and was last down 2.8%, on pace for its largest daily decrease since April. Concerns that persistent higher inflation will likely push central banks to become more hawkish led government bond markets across the Eurozone, the US, and the UK to sell off dramatically.
By claiming the campaign was better than expected, US President Donald Trump attempted to defend a wide-ranging, unrestricted attack on Iran on Monday. The sharp increase in natural gas and oil prices is the main concern of merchants. According to George Moran, European macro analyst at RBC Capital Markets, “the most notable development for Western Europe is another surge in natural gas prices, which is bringing back quite a lot of fears of potentially a repeat of what we saw in 2022, when Russia invaded Ukraine.
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