Tensions between Israel and Iran intensified, global stock markets took a heavy turn, and the Dow fell more than 700 points. Oil prices surged to their biggest one-day gain since March 2022 amid concerns about reduced supply. Risk aversion helped gold close to record highs, but U.S. Treasury yields fell and then rose as inflation fears triggered by oil prices suppressed safe-haven buying in the short term.
The global market immediately "tensed"
In the early morning of the 13th, Israel launched an attack on Iran. As soon as this news came out, the global market immediately "tensed", and the prices of various assets fluctuated.
U.S. stocks opened lower, with the S&P falling back below 6,000
As the conflict intensified, U.S. stocks opened lower, the S&P 500 fell back below 6,000 points, and the Dow Jones fell nearly 1.8% at one point. It can be said that this geopolitical turmoil directly made the stock market "sneeze".
Oil prices soared, and WTI crude oil soared by more than 13% at one point
As soon as the situation in the Middle East became tense, concerns about crude oil supply immediately increased. The price of WTI crude oil soared by more than 13% at one point, and although it has since retreated, the increase is still not small. One sentence summary: As soon as the news of the war came out, oil prices rushed first.
The U.S. bond market staged a "heartbeat game"
Initially, risk aversion pushed Treasury yields lower (as everyone bought bonds as a safe-haven approach), and the 10-year Treasury yield fell to 4.31% at one point. However, inflation fears triggered by higher oil prices have since returned, causing Treasury yields to turn around and recover, with both 2-year and 10-year yields rising more than 4 basis points. Fearful of risk at first, and then afraid of inflation, the U.S. bond market played a heartbeat game.
European stock session: Conflicts intensified and airline stocks came under pressure
During the European stock trading session, according to CCTV, Israel said that Iran launched more than 100 drones at it. The news further heightened the nervousness in the market, and the 10-year Treasury yield fell at one point. However, inflation concerns from higher oil prices quickly dampened safe-haven buying, and Treasury yields all turned higher.
Airline stocks fell in many parts of the world
Aviation stocks in many parts of the world have also been affected by the closure of airspace in many countries due to Israel's attack on Iran. The S&P 1500 airline index fell nearly 4% to its lowest level since May 7. Shares of American Airlines and United Airlines fell more than 5% each.
Energy, oil & gas and PV sectors boosted the upside
Despite the overall market sentiment, energy-related sectors performed strongly. The energy, oil and gas and photovoltaic sectors were all boosted by surging crude oil prices, with the oil and gas sector rising nearly 2.7%.
The stock market was green, and the S&P fell below 6,000 points
On Friday, the three major U.S. stock indexes all fell: the S&P 500 index closed down 1.13%, falling below the key psychological barrier of 6,000 points at 5,976.97 points, and the Dow Jones Industrial Average plummeted 769 points, or nearly 1.8%, to close at 42,197 points; The Nasdaq was not spared, falling 1.3% to close near 19,406 points. This decline directly caused the three major stock indexes to record negative returns, and market confidence was a little frustrated.
The fear index soared, and the VIX returned to above 20
As market sentiment weakened, the VIX index, which represents "panic", also rushed to 20.84, up as much as 15.65%. Over the week, the VIX has risen by more than 24%, indicating that investors are becoming more sensitive to uncertainty about the future.
The seven giants of technology collectively pulled back, and only Tesla bucked the trend and blew red
The Big Seven (Big 7) a general decline; Only Tesla stood out, rising slightly by 1.94%, which can be regarded as saving a little face for the technology sector. But having said that, Tesla has been in turmoil recently, and it is good to be able to rise against the market.
Oil prices are starting to soar
Affected by Israel's attack on Iran, the global energy market was instantly tense, and oil prices rushed directly to the "hot search"! WTI crude oil (July contract) rose $4.94, or 7.26%, to close at $72.98 a barrel; At one point during the session, it soared to $77.62, which is not far from the June 2022 high of $78.48; Over the course of the week, WTI has skyrocketed by 13%, which can be described as a "rocket rise".
Brent crude oil on the other side (August contract) It also did not fall: it rose by $4.87, or 7.02%, to close at $74.23 per barrel; It also rushed to $78.50 intraday; The week-long increase also reached 11.67%. In a word: as soon as you sneeze in the Middle East, the oil price will be cold and feverish.
While oil prices have skyrocketed, natural gas has not been so lucky:
NYMEX July natural gas futures closed up nearly 2.55% at $3.581/MMBtu; However, for the whole week, it still fell by more than 5.36%. It shows that although there is a short-term rebound, the overall supply and demand pattern has not yet fully strengthened, and investors still need to observe the follow-up trend.
Gold hits new highs: Safe-haven demand drives gold prices soar
Geopolitical risks are heating up, and gold is naturally sought after as a traditional safe-haven asset. On the day of Israel's attack on Iran, spot gold once broke through the $3,400 mark and finally closed at $3,434.40 per ounce, up 1.43% in a single day; By the morning of the Asia-Pacific region, gold prices continued to rise, once standing above $3440 and fluctuating at a high level; For the whole week, gold has risen by more than 3.7%, which can be said to be "shining".
Jingtai Investment Suggestion|Geopolitical disturbances are intensifying, and the allocation logic should be flexible
From the global market, it can be seen that the impact of geopolitical risks on the market is becoming more and more obvious; Safe-haven assets such as energy and gold have become safe havens for capital; Risk assets such as industrial metals and equities are under pressure.
For investors, in this environment, they can consider adding some safe-haven asset allocation, such as gold ETFs, U.S. bonds or volatility hedging tools, while maintaining sensitivity to geopolitical situations.
