Asian and U.S. stock markets suffer sharp declines, influenced by spikes in U.S. bond yields and escalating tensions in the Middle East. Major technology firms and oil prices are significantly affected, stirring global economic fears.
On Tuesday, Asian stock markets experienced significant declines, influenced by a surge in U.S. bond yields that triggered a global sell-off. The Shanghai Composite index in China fell by 1.7%, while Hong Kong’s Hang Seng lost 2.1%, and Tokyo’s Nikkei 225 dropped by 1.9%. The South Korean Kospi and Australia’s S&P/ASX 200 both also saw declines of more than 1.8%.
This sell-off extended to Wall Street where major indexes such as the S&P 500 and Dow Jones Industrial Average faced losses following robust U.S. spending data that pushed Treasury yields higher. Large technology firms like Apple, Nvidia, and Microsoft saw their stock prices fall due to these rising yields, which pose a threat to their future earnings valuations.
Additionally, oil prices have been impacted by recent tensions in the Middle East, particularly due to an attack on Israel by Iran, adding to fears of inflation. Despite these geopolitical tensions, markets had earlier remained relatively steady, with oil traders closely observing Iran’s attempts to maintain oil exports despite regional instability.
In Europe, the UK’s FTSE 100 index underperformed compared to other European indexes, influenced by a dip in mining and energy stocks. Conversely, European stocks like Germany’s DAX and France’s Cac 40 generally fared better, buoyed partly by optimism over easing Middle East tensions.
Meanwhile, the overall European market, including the Stoxx Europe 600 index, witnessed declines amid growing concerns over the U.S. economic outlook and further tensions in the Middle East. Investors are increasingly cautious, given the potential impacts on global inflation and interest rate decisions by central banks, particularly with the U.S. Federal Reserve potentially reevaluating the need for significant rate cuts.
