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Oil surges, stocks drop as Israel strikes Iran

Israel launched a strike on Iranian targets early Friday, escalating tensions in the Middle East amid US efforts to halt Iran’s nuclear material production. While the US denied involvement, markets reacted sharply, with oil prices spiking, US stock futures falling, and safe-haven assets like gold rallying. The US Dollar Index was trading higher, and stock indices in Asia were under pressure. 

  • Date
  • Auteur Shane Strowmatt, LGT
  • Temps de lecture 5 minutes

Oil
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Israel launched a large-scale military operation, "Operation Rising Lion," on Friday, targeting Iran's nuclear facilities, missile sites, and key commanders to prevent Tehran from developing nuclear weapons. The strikes included attacks on the Natanz uranium enrichment site, reportedly killing senior Iranian military figures and nuclear scientists, while Israel prepared for potential retaliatory missile and drone strikes. Israeli Prime Minister Benjamin Netanyahu described the operation as critical to national security, while Iran's Supreme Leader Ayatollah Khamenei vowed revenge. Oil prices surged, with Brent crude at USD 74.84 per barrel and West Texas Intermediate (WTI) at USD 73.67, both gaining around 8% higher. Volatility could remain high as traders brace for potential Iranian retaliation, which could disrupt oil supplies and further pressure global equities. Defensive sectors such as energy and utilities could benefit amid the uncertainty.

Asian stocks slide amid global volatility

Asia-Pacific equity markets were trading lower on Friday, with the Israeli attack pressuring market sentiment. Japan’s Nikkei 225 was down 1.1%, while Korea’s Kospi fell 1.1%. Australia’s S&P/ASX 200 edged 0.3% lower, and Hong Kong’s Hang Seng Index dropped 0.9%. Mainland China’s CSI 300 was also under pressure, slipping 0.8%.

US stocks gain on easing inflation signals

US stock markets closed with modest gains on Thursday, supported by signs of cooling inflation. The Dow Jones Industrial rose 0.2% to 42,967.62 points, while the S&P 500 gained 0.4%, and the Nasdaq 100 added 0.2%. Boeing shares fell 4.8% after a fatal crash involving a 787 Dreamliner in India, while Oracle surged 13% on a strong revenue outlook. US producer price data for May showed a 0.1% increase, slightly below economists' expectations, reinforcing hopes that the Federal Reserve may potentially cut rates later this year. US wholesale prices increased by 2.6% year-on-year in May, according to the Labor Department's report on Thursday. Excluding food and energy, core wholesale prices were up 3% annually and 0.1% monthly.

US jobless claims remain elevated 

The US Labour Department reported on Thursday that initial unemployment claims remained steady at 248,000 for the week ending 7 June, reflecting ongoing softening in the labour market. The market had expected a slight decline to 240,000 claims.

European stocks retreat as growth concerns weigh

European stock markets ended in the red on Thursday. The Euro Stoxx 50 and Germany’s DAX both dropped 0.7%. France’s CAC 40 declined 0.1%, and the Swiss Market Index inched up 0.1%. European markets were expected to open lower on Friday after the Israeli attack.

UK economy contracts as US tariffs bite

Britain's gross domestic product fell by 0.3% in April compared to March, marking the sharpest contraction since October 2023, according to data released on Thursday. The decline, larger than the market had anticipated, was driven by a significant drop in exports to the United States following the introduction of tariffs and the conclusion of a temporary property tax break. Goods exports to the US fell by GBP 2 billion, the largest monthly decline since records began in 1997.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: German Harmonised Consumer Price Index (08:00), and University of Michigan US Consumer Sentiment Index (16:00).

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Editor: Alessandro Fezzi
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