Global Markets Slide as Oil Hits $108 and Bond Yields Surge

Global markets came under heavy pressure on Friday as rising inflation fears and soaring oil prices triggered a broad selloff across bonds and equities. Investors are increasingly concerned that the ongoing Iran conflict and disruptions around the Strait of Hormuz could keep inflation elevated and push central banks toward faster interest rate hikes.

U.S. Treasury yields climbed to their highest levels in nearly a year, with the benchmark 10-year yield rising to 4.53%, while 30-year yields surged above 5.06%. European bond markets also weakened sharply, as German 10-year Bund yields jumped to 3.11% and Italian 10-year yields climbed to 3.87%.

Oil prices continued to rally amid fears of supply disruptions in the Middle East. Brent crude traded near $108 per barrel, up roughly 7% this week, while U.S. West Texas Intermediate rose above $103. Analysts warn that continued tensions around the Strait of Hormuz could keep global energy markets under pressure for months.

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Asian stock markets posted steep losses, with Japan’s Nikkei dropping 1.8% and the MSCI Asia-Pacific index falling 2.3%. South Korea’s KOSPI briefly crossed the 8,000-point mark before plunging more than 5%. U.S. futures also slipped despite strong gains in tech giant Nvidia earlier this week.

The U.S. dollar recorded its biggest weekly gain in more than two months as investors increased bets on a possible Federal Reserve rate hike later this year. Markets are now pricing in nearly a 50% probability of a Fed hike in December, compared to less than 20% just a week ago.

At the same time, investors are closely watching discussions between Donald Trump and Xi Jinping in Beijing, where talks reportedly focused on Iran, global trade, and the future of energy supply routes.

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