As of 12:00 Germany time (CEST, UTC+2)
TL;DR: Renewed U.S.-Iran clashes, oil back above $100 and a pause in the AI-led equity rally shaped the cross-asset tape into Friday’s European session.
In Asian Equity Markets stocks traded lower on Friday as renewed fighting between the U.S. and Iran tested hopes for a quick diplomatic resolution and pushed investors to take some profit after a strong week. MSCI’s broadest index of Asia-Pacific shares outside Japan fell around 1 percent, although several major markets remained on track for strong weekly gains after the AI-led rally earlier in the week. Japan’s Nikkei slipped from record highs after Thursday’s surge, while Hong Kong’s Hang Seng also moved lower. South Korea’s KOSPI was broadly steady and remained on course for one of its strongest weekly gains since 2008, supported by Samsung, SK Hynix and the broader semiconductor trade.
In Currency Markets the U.S. dollar edged lower despite the renewed U.S.-Iran clashes, as investors remained cautiously optimistic that the conflict could still move toward a negotiated outcome. The dollar index traded around 98.2, after briefly touching its lowest level since late February earlier in the week. The euro was slightly firmer near $1.174, while sterling also held up as UK election results came into focus. The yen remained supported by intervention risk, with dollar-yen hovering around 156.8 after recent sharp yen rallies and repeated warnings from Tokyo. FX markets remained driven by the same three variables: oil, equities and the credibility of a Middle East de-escalation.
In US Equity Markets stocks ended lower on Thursday as investors took profits after record highs and waited for Iran’s response to the latest U.S. peace proposal. The S&P 500 fell around 0.4 percent, the Nasdaq Composite slipped around 0.1 percent and the Dow Jones Industrial Average lost around 0.6 percent. The move followed a strong rally earlier in the week, when AI-linked technology shares and lower oil prices pushed the S&P 500 and Nasdaq to fresh records. U.S. futures were modestly higher by Friday morning, suggesting investors were not yet treating the renewed Gulf clashes as a full risk-off event, while attention also turned to the U.S. non-farm payrolls report due later in the day.
In Commodities Markets oil moved back above $100 per barrel after renewed fighting between the U.S. and Iran raised fresh concerns around the Strait of Hormuz and the durability of the ceasefire. Brent crude traded around $101 per barrel in late-morning European trade, while U.S. crude also gained but remained below recent highs. The move partially reversed the sharp decline seen earlier in the week, when peace-deal hopes had pushed crude lower and reduced some inflation pressure. Gold stayed supported near the $4,700 per ounce area as the weaker dollar and geopolitical uncertainty helped precious metals, while silver and other metals also held firm after recent gains.
In European Equity Markets stocks fell by late morning as the renewed escalation in the Gulf weighed on sentiment and revived concerns around energy-driven inflation. The pan-European STOXX 600 dropped around 0.9 percent and was on track for a weekly loss, while Germany’s DAX and the UK’s FTSE 100 also moved lower. Financials and industrials were among the biggest drags, while energy-sensitive sectors remained under pressure from higher crude prices. Rheinmetall fell after a broker downgrade, IAG declined after a weaker profit outlook linked partly to higher jet fuel costs, and Commerzbank slipped after announcing job cuts. Amadeus outperformed after stronger quarterly earnings.
In Bond Markets yields were mixed as investors balanced renewed oil-driven inflation risk against softer equity sentiment and still-fragile hopes for a diplomatic solution. U.S. Treasury yields were slightly lower, with the 10-year yield trading around 4.36 percent and the 30-year yield just below 5 percent. In Europe, bond markets remained sensitive to the energy shock, with ECB officials warning that a broader inflation impact from the Iran conflict could require tighter policy. Markets continued to price a more restrictive central-bank backdrop than before the oil shock, but the next move in rates remains highly dependent on whether the Strait of Hormuz risk premium fades or rebuilds.
