LGT Navigator

Oil surge leaves markets on edge

Escalating tensions around Middle Eastern shipping routes kept energy prices elevated on Thursday, heightening concerns that inflation could complicate the outlook for interest rates. US and European equities fell on Wednesday, while Asian markets trading mostly lower on Thursday as Treasury yields remained close to their highest levels in several years. Investors awaited US producer-price data on Thursday and consumer-price figures on Friday, with futures markets assigning a roughly 60% probability to a Federal Reserve rate increase next week. The market expects the European Central Bank to increase its deposit facility rate by 25 basis points this afternoon.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Negative market data
© Shutterstock

Asian equities were mostly lower on Thursday, with technology shares under pressure as Brent crude remained above USD 100 per barrel, while lower bond yields offered limited support to risk appetite. Japan’s Nikkei 225 lost 0.2%, Korea’s Kospi rose 0.1% and Hong Kong’s Hang Seng Index dropped 1.5%. Australia’s S&P/ASX 200 fell 1.2%, while mainland China’s CSI 300 declined 0.6%. Brent crude oil futures fell 0.6% to USD 100.58 per barrel after escalating US-Iran attacks on shipping raised concerns about Middle Eastern energy supplies, while the ten-year US Treasury yield head near 4.8%, close to its highest level since 2023. Gold rose 0.6% to around USD 4430 per ounce and bitcoin fell 0.6% to around USD 78,500.

US stocks fall as oil climbs

US equities declined on Wednesday as higher oil prices fuelled concerns that inflation could keep interest rates elevated. The Dow Jones Industrial Average dropped 0.8% to 52,380.66 points, the S&P 500 lost 0.5% to 7636.36 points and the Nasdaq-100 slipped 0.3% to 29,421.55 points. Facebook parent company Meta Platforms surged 6.6% after unveiling its Muse artificial intelligence assistant, supporting several chip and memory shares, while Alphabet fell more than 2% amid potential competition for its Gemini AI agent. Oil majors Chevron and ExxonMobil gained, supported by elevated oil prices.

European stocks fall on oil concerns

European equities declined on Wednesday as rising oil prices heightened concerns about inflation and interest rates ahead of the European Central Bank’s monetary policy decision today. The Euro Stoxx 50 fell 1.6% to 6311.75 points, while Switzerland’s SMI dropped 1.8% to 13,804.70 points, its lowest level in two and a half months. Higher Brent crude prices supported oil companies including Eni and TotalEnergies.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Adobe and Oracle.

Economic data in focus: German Consumer Price Index (08:00), Italian manufacturing production (10:00), European Central Bank interest rate decision (14:15), US Producer Price Index (14:30), US weekly initial jobless claims (14:30) and US existing home sales (16:00).

LGT helps you make informed investment decisions

Global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.