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US stock prices fall as oil prices spike past $100 and Middle East tensions fuel investor anxiety.
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Treasury yields around 5% are putting pressure on growth stocks, and inflation fears are hitting consumer spending.
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Bitcoin and crypto markets rebound as energy policy and oil supply releases calm the markets slightly.
The US stock market took a big hit on Thursday. Major indexes fell across the board. Investors reacted to the oil prices rising past $100, US Treasury yields creeping towards 5% and rising tensions between Iran and the Middle East by dumping Dow Jones, S&P 500 and Nasdaq.
The Dow Jones closed at 46,932.79 points, down 484 (-1.10%), while the S&P fell to 6,699 points, losing 76.80 (-1.13%), while the Nasdaq dropped to 22,389.35 points, a drop of 325 (-1.44%).
Middle East Strikes Send Prices of Oil Soaring
The energy markets have been roiled by more volatility. Brent crude reached $96.14 and West Texas Intermediate crude rose almost 9% to reach $95.52. Brent crude briefly crossed $100 per barrel. The spike in crude oil prices came after Iran intensified its attacks on energy facilities throughout the Middle East. This included strikes on tankers near Iraq.
Iraq responded by temporarily closing some oil ports and disrupting the global supply. Iranian leaders warned oil prices could rise to $200 per barrel, if tensions continued. They also threatened to close the Strait of Hormuz, a vital shipping route that carries nearly one-fifth of all the world’s crude oil.
Related: Why is Wall Street paying attention to XRP? A Brief on Market Sentiments
Treasury Yields, Inflation and Markets
The rising oil prices have heightened inflation expectations, increasing corporate costs and reducing consumer spending. The 30-year Treasury yield rose to 4.87% and is now edging closer to the psychologically important 5% mark.
Such yields have historically triggered stock sales. Due to their sensitivity to inflation, growth stocks and technology stocks were the most affected. Investors also closely monitor the Federal Reserve’s next rate decision which further intensifies uncertainty.
Crypto Rebounds Despite Policy Signals
Today, the crypto market rebounded after Bitcoin briefly dropped below $70,000. According to CoinMarketCap the total crypto market now has a value of $2.37 trillion with Bitcoin trading at around $70400.
Related – Crypto Traders Switch to Oil Perpetuals as Iran Tensions Drive Volatility
Karoline Leavitt, White House Press Secretary, said that the administration is considering temporarily suspending the Jones Act. This could help keep energy and agriculture shipments moving smoothly. This, in turn, supports crypto market stability.
IEA members also agreed to release 400,000,000 barrels of crude oil to ease global pressures on supply. Investors are still concerned about the Middle East tensions. Analysts estimate that a U.S. – Iran conflict could last up to May.
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