- Iran's indefinite closure of the Strait of Hormuz has prompted a new round of military retaliation by the United States, increasing global energy supply uncertainty and causing Brent crude oil prices to surge by 4.1% to $79.11 per barrel during trading.
- Global safe-haven funds are rapidly flowing into dollar assets, pushing the dollar index up to 101.13. Meanwhile, due to renewed inflation risks, the yield on two-year U.S. Treasury bonds has risen to 4.239%.
- Equity markets in Asia and the U.S. are generally under pressure, with South Korea's stock market notably dropping by 5.4% due to a significant correction in the highly leveraged semiconductor sector, and Nasdaq futures are also weighed down by concerns over capital expenditure by tech giants.
Risk of Energy Supply Disruption Drives Oil Prices Up
Brent crude and West Texas Intermediate oil prices saw a strong rebound during the Asia-Pacific trading session, erasing the geopolitical easing expectations of the past two months. With about one-fifth of the world's oil and liquefied natural gas transported through the Strait of Hormuz, the spread of geopolitical conflict to energy infrastructure such as Kuwait's offshore drilling platforms has heightened market concerns about long-term supply disruptions. If the Middle East conflict further escalates, the premium on the global energy supply chain will accelerate, potentially pushing oil prices back to the significant $100 per barrel mark.
Spread of Risk Aversion Severely Hits Equity Markets
The escalation of the geopolitical crisis has rapidly cooled risk appetite in global financial markets, with Asian stock markets bearing the brunt. Japan's Nikkei Index (N225:JP) fell sharply by 1.6%, while the highly leveraged, high-beta Korea Composite Stock Price Index (KOSPI:KR) significantly retreated by 5.4% due to pressure on semiconductor stocks. Meanwhile, U.S. Nasdaq futures (NQ:US) fell by 0.9%, reflecting growing investor concerns about the erosion of cash flow by tech giants' multi-billion-dollar AI capital expenditures amid rising energy costs.
Inflation Resurgence Expectations Push U.S. Bond Yields Higher
Driven by soaring energy prices, financial markets' expectations of inflation resurgence have strengthened again, leading to a potentially more hawkish stance from the Federal Reserve (Fed) in future policy. The yield on two-year U.S. Treasury bonds has climbed to 4.239% under the dual drive of safe-haven liquidity and tightening expectations, marking a new high since early 2025. If core inflation indicators continue to rebound due to supply chain disruptions, market pricing for rate cuts within the year may face a complete reassessment, reducing the attractiveness of non-interest-bearing gold assets, with New York gold prices falling by 1.1% in a single day.
Currency Market Divergence and Geopolitical Diplomacy Stalemate
Against the backdrop of the dollar index (DXY) rebounding to 101.13, the exchange rates of the euro and other major non-U.S. currencies are generally under pressure. Due to Europe's high dependence on imported energy, this energy supply crisis has further temporarily suppressed the euro's valuation. Iran has declared that the era of unilateral agreements is over and demands that the U.S. fulfill its commitment to normalize energy exports before resuming negotiations, indicating a low likelihood of resolving the strait transportation crisis through diplomatic means in the short term.
