New York (TDI): Global oil markets surged on Thursday, with prices hitting a four-year high as traders reacted to fears that US President Donald Trump could extend or tighten a blockade affecting Iranian oil exports.
Benchmark Brent crude jumped around 6 percent to $122.53 per barrel, driven by concerns that disruptions in the Strait of Hormuz may persist, further straining global energy supplies.
The sharp rise in oil prices sent ripples across financial markets. Bond yields climbed as investors reassessed the outlook for interest rates, anticipating prolonged inflationary pressure fueled by higher energy costs.
Expectations for monetary easing have shifted significantly, with markets now largely ruling out interest rate cuts by the Federal Reserve this year. Instead, there is growing speculation that borrowing costs could rise again in the coming months.
The change in sentiment follows a notably divided stance within the central bank, where policymakers expressed differing views on the economic outlook and inflation risks, particularly those linked to rising global energy prices.
Read More: Trump Discusses Oil Market Impact of Iran Blockade
Investors are also closely watching signals from the European Central Bank and the Bank of England, both of which are expected to adopt a more cautious, potentially hawkish approach.
Despite the volatility, equity markets, particularly in Asia, showed resilience. Technology and artificial intelligence-related stocks continued to draw support from strong corporate earnings, helping offset broader economic concerns.
Analysts note that optimism around AI-driven growth is helping sustain investor confidence, even as risks from higher borrowing costs, inflation, and geopolitical tensions loom.
In currency markets, the US dollar strengthened alongside rising yields, while the Japanese yen weakened, reflecting shifting expectations around global monetary policy and risk sentiment.
Read More: Oil Surges Over 4% as Iran Keeps Hormuz Closed Amid Tensions
Overall, while stock markets remain supported by strong earnings in key sectors, the surge in oil prices and ongoing geopolitical tensions are keeping investors on edge.
