By Chibuike Oguh and Harry Robertson
NEW YORK/LONDON, March 27 (Reuters) – Global stock markets fell and oil prices rose on Friday, driven by lack of progress in bringing an end to the four-week-old Middle East conflict that is beginning to sap consumer and business confidence.
The global equity market selloff has deepened in recent days, as U.S. President Donald Trump’s statements about negotiations are increasingly viewed as less important than the situation in the Gulf, where attacks persist and the crucial Strait of Hormuz is still effectively blocked by Iran.
On Wall Street, all three main indexes were trading lower with consumer discretionary, financial and technology shares driving losses. Economists and businesses increasingly believe the conflict’s disruption to world oil supply will filter through to inflation worldwide and drag on growth.
The Dow Jones Industrial Average fell 1.6%, the S&P 500 lost 1.6% and the Nasdaq Composite shed 2.1%. The broad-market S&P has lost 9% from its record close in January.
“Words alone aren’t cutting it right now, with President Trump’s extension of the pause on Iran energy strikes failing to lift the mood in any meaningful way,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown. “Tangible evidence of progress is what’s needed.”
Trump extended a deadline for Iran to reopen the Strait of Hormuz, but Iran has given no direct indication that it was ready to negotiate. The country’s Islamic Revolutionary Guard Corps reiterated it would continue to disrupt shipping through the strait, which is used to ship roughly one-fifth of the world’s oil and gas supply.
Brent crude futures
rose 4.2% to $112.57 a barrel. U.S. West Texas Intermediate futures
settled up 5.4% at $99.64.
“The longer the Strait of Hormuz is closed the greater the disruption and therefore the uncertainty around oil prices,” said Dan Boston, global head of the small company team at Polar Capital in Florida. “You’re seeing anything from food to transportation costs filtering their way into inflation expectations. As those expectations rise, consumer sentiment starts to fall as well.”
The University of Michigan’s index of U.S. consumer sentiment fell more than expected in March, touching a three-month low.
The pan-European STOXX 600 index dropped 0.95%. Germany’s DAX index fell 1.4% while London’s FTSE 100 index shed 0.05%.
MSCI’s index of Asian shares excluding Japan fell 0.9% overnight. MSCI’s gauge of stocks across the globe fell 1.34%.
NASDAQ VEERS INTO CORRECTION TERRITORY
The tech-focused Nasdaq Composite veered into correction territory after dropping 2.4% on Thursday, leaving the index down nearly 11% from its record close in late October.
“The unbridled optimism that propelled Nasdaq to all-time highs in the fourth quarter is fading as the macro backdrop sours and uncertainty about the impact of AI across the tech ecosystem clouds the horizon,” James St. Aubin, chief investment officer at Ocean Park Asset Management, said.
Government bond yields rose, as central banks are seen as more likely to raise interest rates to head off a potential inflationary shock stemming from higher energy costs. Yields rise as prices fall and vice versa.
The 10-year U.S. Treasury yield, which sets the tone for borrowing costs around the world, rose more than 1 basis point to 4.432%.
Money markets now see a roughly 60% chance the U.S. Federal Reserve raises rates this year, a sharp change from late February when traders were betting on two cuts in 2026.
Germany’s 10-year bond yield rose 0.7 basis points to 3.105%.
The U.S. dollar was slightly higher against the major peers including the euro, Japanese yen and Swiss franc.
The dollar rose to its highest level against the yen since July 2024. It was last up 0.35% to 160.365 yen. The dollar was up 0.50% to 0.79810 versus the Swiss franc. The euro was down 0.15% at $1.151250.
The U.S. dollar index, which tracks the currency against six peers, rose 0.27% to 100.16 for a fourth straight session of gains.
Spot gold was up 3% to $4,513.73 an ounce.
(Reporting by Chibuike Oguh in New York and Harry Robertson in London; Editing by Christopher Cushing, Sonali Paul, Chizu Nomiyama and Andrew Heavens)
