Global stock markets largely declined on Thursday while oil prices rose as investors reacted to increasingly assertive rhetoric from U.S. President Donald Trump regarding Iran.
Brent crude oil reached its highest level since July during trading in London.
“Oil prices continue to climb, with Brent returning above $70 a barrel, as fears of a military confrontation between the U.S. And Iran rattled energy markets,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
Concerns surrounding Iran also manifested on Wall Street, where major indices fell throughout the day. The market reaction underscores the sensitivity of global equities to geopolitical risk.
“It appears the market is more nervous about a potential strike on Iran,” noted Art Hogan, analyst at B. Riley Wealth Management.
Major European indices also saw declines.
In Paris, shares of Airbus fell 7.2% as its annual profit lagged behind analyst expectations, while Renault saw a 3.1% decrease in its share price.
The Dow Jones Industrial Average closed down 0.5% at 49,395.16 on Thursday, while the Standard & Poor’s 500 dropped 0.3% to 6,861.89. The Nasdaq Composite also decreased, falling 0.3% to 22,682.73.
London’s FTSE 100 declined 0.6% to 10,627.04, the CAC 40 in Paris fell 0.4% to 8,398.78, and Frankfurt’s DAX decreased 0.9% to 25,043.57.
West Texas Intermediate (WTI) crude oil rose 1.9% to $66.43 a barrel in electronic trading in New York. Brent crude increased 1.9% to $71.66 a barrel in London.
The price of natural gas at the Title Transfer Facility (TTF) in the Netherlands increased 6.5% to €33.52 per megawatt-hour.
The euro fell against the U.S. Dollar, trading at $1.1767 compared to $1.1783. The British pound weakened to $1.3458 from $1.3495, while the U.S. Dollar strengthened against the Japanese yen, moving from ¥154.81 to ¥155.07. The euro rose against the British pound, trading at 87.43 pence compared to 87.31 pence.
