As of 12:00 Germany time (CEST, UTC+2)
TL;DR: Inflation fears retook control as oil pushed higher, global bond yields jumped and equities pulled back from record levels into Friday’s European session.
In Asian Equity Markets stocks fell on Friday as investors shifted focus from this week’s AI-led rally back toward inflation risk, higher yields and persistent uncertainty around the Middle East conflict. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped around 2.6 percent, while Japan’s Nikkei slid about 2 percent after data showed wholesale inflation accelerated to 4.9 percent in April, its fastest pace in three years. The hotter Japanese price data reinforced expectations that the Bank of Japan may need to keep tightening, adding another layer of pressure to regional sentiment after a strong run in risk assets earlier in the week.
In Currency Markets the U.S. dollar strengthened as rising Treasury yields and renewed oil-driven inflation concerns pushed investors back toward the greenback. The dollar was on track for its largest weekly gain in roughly two months, while the yen weakened beyond 158 per dollar, keeping traders alert to the risk of renewed intervention from Tokyo. Sterling fell toward a one-month low near $1.335 after political turmoil in the UK deepened, while the euro also weakened as the stronger dollar dominated major FX trading. Currency markets increasingly reflected a return to rate-differential trading, with investors favouring currencies backed by firmer yield support.
In US Equity Markets stocks rose on Thursday as technology shares extended their rally and investors watched the Trump-Xi summit for signs of progress on trade and the Strait of Hormuz. The Dow Jones Industrial Average gained 0.75 percent to 50,063.46, the S&P 500 rose 0.77 percent to 7,501.24 and the Nasdaq Composite advanced 0.88 percent to 26,635.22, with the S&P 500 and Nasdaq both reaching fresh record closing highs. Nvidia climbed 4.4 percent after the U.S. cleared sales of its H200 chips to Chinese firms, while Cisco surged after lifting its revenue forecast. The upbeat session came despite increasingly hawkish inflation signals from this week’s data flow.
In Commodities Markets oil climbed again as uncertainty around a Middle East peace deal and the reopening of the Strait of Hormuz remained firmly in focus. Brent crude rose more than 3 percent to around $109.4 per barrel and was on track for a weekly gain of more than 7 percent, keeping energy prices at the center of the inflation debate. Precious metals came under pressure as higher yields and a firmer dollar reduced demand for non-yielding assets. Spot gold fell to a one-week low near $4,557 per ounce, while silver, platinum and palladium also weakened sharply, reflecting the broader shift toward tighter financial conditions rather than pure safe-haven buying.
In European Equity Markets stocks tumbled by late morning as the renewed oil shock, rising bond yields and stalled U.S.-Iran negotiations hit risk appetite. The pan-European STOXX 600 fell around 1.4 percent, with Germany’s DAX down roughly 1.7 percent and both France’s CAC 40 and Spain’s IBEX 35 lower by about 1.4 percent. The UK’s FTSE 100 also declined around 1.3 percent amid growing domestic political uncertainty. Technology and materials were among the weakest sectors, while semiconductor names including ASML, ASM International, BE Semiconductor and Aixtron sold off sharply. Technoprobe stood out after raising its 2026 outlook.
In Bond Markets yields surged as investors increasingly priced the risk that higher energy costs will keep inflation elevated and force central banks to maintain, or even tighten, restrictive policy. The U.S. two-year Treasury yield rose to around 4.07 percent, while the 10-year yield climbed to about 4.54 percent. German 10-year yields moved up toward 3.11 percent, and bond markets in Japan and the UK also came under pressure. Money markets now assign a meaningful probability to another Federal Reserve rate hike this year, a sharp reversal from earlier expectations for cuts. The rates move became the dominant macro story into Friday, weighing directly on equities and precious metals.
