By Dow Jones Newswires Staff
Stocks sold off and short-term U.S. Treasury yields rose after oil surged beyond $113 a barrel as attacks on Middle East energy infrastructure intensified.
Iranian attacks caused significant damage to Qatar's liquefied-natural gas export facility at Ras Laffan, after Israel struck the South Pars gas field Wednesday. Both Iran and the U.S. threatened further attacks on oil-and-gas infrastructure.
As expected, the Federal Reserve held rates steady Wednesday, with Chair Jerome Powell saying that rate cuts were off the table until inflation cools. The dollar strengthened, helping to push gold lower, while the spreads between short-dated and long-dated U.S. bonds tightened. Yen weakness--deepened after the Bank of Japan left the door open to a further rate hike--raised the possibility of the bank intervening if the yen rises above 160 against the dollar.
Central bank week continues. The Swiss National Bank held rates pat, as did rate-setters in Japan, Taiwan and Sweden. The European Central Bank and the Bank of England are expected to follow suit later Thursday.
--In early European trade, Brent crude climbed 5.4% to $113.20 a barrel and was up nearly 60% on the month. WTI, the U.S. oil gauge, rose 1.2% to $93.57 a barrel. "Troubles for global gas markets aren't just about when flows through the Strait of Hormuz resume, but how long repair work at the sites might take," analysts at ING said. Damage to these facilities means traders have to price in longer supply outages, as production could potentially be offline for months.
Natural-gas prices spiked more than 20%, with the front-month Dutch TTF contract--the European benchmark--trading at 67.25 euros a megawatt-hour after briefly touching 70 euros at the open.
--U.S. stock futures edged lower, with losses deepening throughout the European morning. Futures tied to the Dow Jones Industrial Average and the S&P 500 were last down 0.4%, while Nasdaq futures fell 0.6%.
Micron Technology tumbled 5% premarket even as the memory chip maker recorded expectation-beating sales and lifted its guidance. The earnings were "as good as it gets for Micron and for better or worse, that raises the bar heading into next quarter," Direxion's Jake Behan said. "That's likely what you're seeing play out in the initial aftermarket reaction."
--Asian equities fell amid fading expectations for Federal Reserve rate cuts and weaker risk sentiment. South Korea's Kospi was 2.6% lower, Japan's Nikkei Stock Average ended 3.4% lower after the BOJ held steady as widely expected. Taiwan's central bank is next to announce its rate decision in Asia, and the tone from policymakers so far this week has been of caution about the threat the energy-price shock poses for the region that depends heavily on fuel imports. Hong Kong's Hang Seng Index declined 2%.
Shares in major airlines in the region declined. Air China and China Eastern Airlines fell 4.75% and 5.5%, respectively, in Hong Kong. Cathay Pacific declined 1.2%.
--European stocks tumbled across all sectors at the opening bell. Basic-materials stocks slid steeply, with miners pulling the U.K.'s FTSE 100 down 1%. Banks also fell, with Standard Chartered and NatWest falling 4.9% and 5.2% in London, respectively. The industrials-heavy German DAX loses 1.5%. Real-estate stocks in the index tumbled 5.7% as fears of an ECB rate hike this year intensified.
France's CAC 40 was down 1.2%, dragged by basic materials and consumer-sensitive stocks like luxuries. Hotel group Accor slid 4.4%. Banks and industrials helped push Spain's IBEX 35 and the Italian FTSE MIB down 1.5% and 1.25%, respectively, while ASML slipped 1.6% in Amsterdam.
--The dollar rose to reflect yet another jump in oil prices. The DXY dollar index, which measures the dollar against a basket of currencies, was up 0.1% at 100.208. "We emphasize that rising global energy prices and tighter global financial conditions would both be supportive factors for the broad U.S. dollar," Danske Bank's Filip Andersson said in a note.
--U.S. Treasury yields also rose with the 10-year yield up 2.8 basis points at 4.281%, according to Tradeweb. The two-year Treasury yield rose 6.2 bps to 3.804%; the 10-year yield is up 2.2 bps at 4.277%; while the 30-year yield rose 1.1 bps to 4.892%, according to Tradeweb.
Yields on U.K. 10-year government bonds climb to a six-and-half-month high amid inflation concerns. Spain and France will hold scheduled government bond auctions Thursday. The Bank of Japan has signaled its willingness to hike rates again soon, Capital Economics' Marcel Thieliant said.
--Gold prices plunged below $4,800 a troy ounce, pressured by a stronger dollar and dimming hopes for further interest-rate cuts in the near term. In early European trading, futures fell 2.9% to $4,755 an ounce. Greenback strength makes dollar-denominated commodities more expensive for overseas buyers.
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(END) Dow Jones Newswires
March 19, 2026 05:34 ET (09:34 GMT)
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