Markets were hit by a “stagflation scare” as a shock oil spike collided with a downside surprise in US jobs data. Brent briefly traded near 120 USD and WTI saw a near‑36% weekly jump on supply disruption through the Strait of Hormuz, while US non‑farm payrolls fell by around 90k versus expectations of a gain, raising fears of slower growth and higher inflation together. Bond yields jumped (10‑year Treasuries up to about 4.14%), credit spreads widened, and both equities and bonds delivered losses over the week, reflecting broad macro stress.
FX Market Reactions
The US dollar behaved as a “safety valve”, rallying strongly early in the week on war and oil headlines before fading into a more mixed close as President Trump signalled the conflict might be “pretty much” complete sooner than markets feared.
The dollar finished up around 1.4% on traditional indices, with biggest intraday swings versus commodity FX: AUD, NZD and GBP outperformed into hopes of de‑escalation, while CAD, EUR, JPY and CHF lagged despite weaker European data and safe‑haven narratives.
Weak German factory orders and industrial production underscored eurozone fragility, but the euro held relatively steady as traders focused more on relative oil‑shock impacts than on European growth alone.
Commodities Market Reactions
The Bloomberg Commodity Index extended its conflict‑driven surge, up about 13% since the start of the Middle East crisis, led by a nearly 40% jump in its energy sub‑index.
Brent crude ripped toward 120 USD before easing on talk of IEA reserve releases and potential output adjustments from Gulf producers, yet still closed at multi‑month highs and kept the energy sector in global equities firmly in the lead.
Grains continued to grind higher on biofuel links and food‑security concerns, while precious metals softened: gold and silver fell roughly 1.7% and 2.6% on the week as investors raised cash, yields rose, and a stronger dollar weighed, even though the underlying case for hard‑asset hedging remains intact.
Indices Market Reactions
Equities sold off globally. In the US, the S&P 500 dropped about 1.3% to around 6,740, the Dow Jones fell 0.9%, and the Nasdaq Composite lost roughly 1.6% as higher oil and weaker payrolls revived fears of slower growth with higher inflation.
Europe was hit harder, with the STOXX 600 down more than 5% as the region’s heavy energy‑import dependence magnified the inflation shock, while Japanese equities slid over 6% on similar energy‑cost worries and Bank of Japan tightening jitters. Chinese markets edged lower but fared somewhat better as investors weighed geopolitics against domestic policy support, and crypto‑linked indices also saw renewed risk trimming, particularly in high‑beta “culture” and DeFi baskets.
Get ready for the week ahead
Visit our market calendar to see all the key economic data, earnings, and events that could move the markets. Plan your trades before the action starts.
Trading forex and futures is high-risk and may result in total loss. Use risk capital only and assess your experience before trading with ATC Brokers.
While ATC Brokers Limited takes reasonable care to ensure the information provided is reliable, no warranty is given as to its accuracy or completeness, and no liability is accepted for any errors or omissions.
