Overview
- Brent crude jumped back above $100 a barrel after Iran-aligned Houthi forces struck two Saudi oil tankers in the Red Sea, threatening the Bab el-Mandeb shipping route and tightening physical oil flows.
- Long-dated U.S. Treasury yields climbed to multimonth and multidecade highs, with the 10-year near 4.71% and the 30-year around 5.17–5.20%, as investors sold bonds on renewed inflation risk.
- Markets have shifted to price a materially higher chance of Federal Reserve tightening in the near term, reversing earlier expectations that policy would ease this year.
- U.S. military strikes on Iranian targets continued and President Donald Trump warned of major punishment for the Houthis, while the administration put new 10–12.5% tariffs on imports from roughly 60 trading partners, adding policy uncertainty.
- Equities fell on concerns about heavy AI capital spending and cash burn at major tech firms, the stronger dollar and a weak yen pushed currency warnings from officials, and higher borrowing costs threaten mortgages and business loans for households and firms.