Oil Surges Past $90, Dollar and Bond Yields Climb on Middle East Risk
Middle East tensions drove WTI crude to six-week highs above $90 while global bond yields spiked and equities slumped Thursday.
Middle East tensions sent oil prices sharply higher Thursday, with WTI crude surging 4.7% to $90.95 and Brent crude jumping 5.1% to $98.91 — marking WTI's first print above $90 in six weeks. The rally reflects intensifying geopolitical risk aversion as traders price in potential supply disruptions, pushing energy markets into breakout territory and fueling broad defensive positioning across asset classes.
The flight to safety lifted the US dollar across the board, with the greenback leading all major currencies on the day. USD/JPY climbed 0.3% to 163.58, sustaining a fresh 40-year high driven by the convergence of Middle East stress and hawkish Federal Reserve expectations. EUR/USD slipped 0.2% to 1.1385 as risk appetite deteriorated.
Read more ECB Eyes September Rate Hike as Energy Prices Drive Inflation →
Bond yields surged in tandem with the oil rally. US 10-year Treasury yields rose another 3 basis points to 4.685%, while German 10-year bund yields briefly touched 3.20% — their highest level since 2011 — and French 10-year yields hit 4% for the first time since 2009. The synchronized yield spike underscores how geopolitical shocks are amplifying existing rate-hike pressures from central banks on both sides of the Atlantic.
Equities bore the brunt of the risk-off mood. Europe's DAX fell 0.7% and France's CAC 40 dropped 1.1%, while US futures pointed to a weak open with S&P 500 futures off 0.6% and Nasdaq futures down 0.8%. Adding to the gloom, Alphabet reported its first-ever negative free cash flow quarter, stoking fresh concerns about AI capital expenditure and sending its shares down nearly 5% in pre-market trading. Gold, typically a haven asset, bucked the pattern and fell 1.1% to $4,081.
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