BREAKING NEWS Israel's Iran strikes rock Wall Street and sends gas prices soaring but there's a silver lining
Oil surged, stocks fell but the dollar strengthened as investors sought safety on Friday following Israel's strike on Iranian nuclear and military targets.
Thursday's attack raised the risk of war between the two countries and broader instability in the Middle East.
The S&P 500 fell 0.7 percent as markets open, while the Nasdaq slid 1.2 percent.
It comes as stock markets have only just recovered from a 20 percent slump following Trump's tariff announcements in April.
The dollar jumped 0.6 percent from the three-year low it hit on Thursday.
Government bonds and the dollar often rise when investors feel less inclined to take risks.
U.S. benchmark crude oil rose by $4.73, or 6.9 percent, to $72.77 per barrel, its biggest gain since the early days of Russia's attack on Ukraine more than three years ago.
Oil prices are likely to rise in the short term but the key question is whether exports are affected, said Richard Joswick, head of near-term oil at S&P Global Commodity Insights.
'When Iran and Israel exchanged attacks previously, prices spiked initially but fell once it became clear that the situation was not escalating and there was no impact on oil supply,' he told the Associated Press.
'Oil price risk premiums could rise sharply if Iran conducts broader retaliatory attacks, especially if on targets other than in Israel,' Joswick said.
China is the only customer for Iranian oil but could seek alternative supplies from Middle Eastern exporters and Russia, he explained.
If oil prices continue to rise it could fuel inflation complicating the Federal Reserve's challenges.
'This goes against what central banks were expecting for oil prices and could potentially change their scenario by heating up inflation and slowing growth,' Alexandre Hezez, chief investment officer at Group Richelieu told Bloomberg.
The latest inflation report showed inflation rose less than expected, giving stocks a boost.
Prices rose 2.4 percent in May compared to the same time last year, a slight increase on the month before, when prices rose 2.3 percent.
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North Wales Chronicle
2 hours ago
- North Wales Chronicle
Zelensky warns oil price surge could help Russia's war effort in Ukraine
The Ukrainian president told journalists in Kyiv that the surge in oil prices threatens Ukraine's position on the battlefield, especially because western allies have not enforced effective price caps on Russian oil exports. 'The strikes led to a sharp increase in the price of oil, which is negative for us,' Mr Zelensky said. 'The Russians are getting stronger due to greater income from oil exports.' Global oil prices rose as much as 7% after Israel and Iran exchanged attacks over the past 48 hours, raising concerns that further escalation could disrupt oil exports from the Middle East. Mr Zelensky said he planned to raise the issue in a conversation with US President Donald Trump. 'In the near future, I will be in contact with the American side, I think with the president, and we will raise this issue,' he said. He also expressed concern that US military aid could be diverted away from Ukraine towards Israel during renewed tensions in the Middle East. 'We would like aid to Ukraine not to decrease because of this,' he said. 'Last time, this was a factor that slowed down aid to Ukraine.' Ukraine's military needs have been sidelined by the US in favour of supporting Israel, Mr Zelensky said, citing a shipment of 20,000 interceptor missiles, designed to counter Iran-made Shahed drones, which had been intended for Ukraine but were redirected to Israel. 'And for us it was a blow,' he said. 'When you face 300 to 400 drones a day, most are shot down or go off course, but some get through. We were counting on those missiles.' An air defence system, Barak-8, promised to Ukraine by Israeli President Benjamin Netanyahu was sent to the US for repairs but never delivered to Ukraine, he added. The Ukrainian president conceded that momentum for the Coalition of the Willing, a group of 31 countries which have pledged to strengthen support for Ukraine against Russian aggression, has slowed because of US ambivalence over providing a backstop. 'This situation has shown that Europe has not yet decided for itself that it will be with Ukraine completely if America is not there,' he said. The offer of a foreign troop 'reassurance force' pledged by the coalition is still on the table 'but they need a backstop, as they say, from America' Mr Zelensky said. 'This means that suddenly, if something happens, America will be with them and with Ukraine.' The Ukrainian president also said the presence of foreign contingents in Ukraine would act as a security guarantee and allow Kyiv to make territorial compromises, which is the first time he has articulated a link between the reassurance force and concessions Kyiv is willing to make in negotiations with Russia. 'It is simply that their presence gives us the opportunity to compromise, when we can say that today our state does not have the strength to take our territories within the borders of 1991,' he said. But Europe and Ukraine are still waiting on strong signals from Mr Trump. Without major US sanctions against Russia, 'I will tell you frankly, it will be very difficult for us', Mr Zelensky said, adding that it would then fall on Europe to step up military aid to Ukraine. In other developments, Russia repatriated more bodies of fallen soldiers in line with an agreement reached during peace talks in Istanbul between Russian and Ukrainian delegations, Russian officials said on Saturday, cited by Russian state media. The officials said Ukraine did not return any bodies to Russia on Saturday. Ukraine's Co-ordination Headquarters for the Treatment of Prisoners of War confirmed in a statement that Russia had returned 1,200 bodies. Ukraine and Russia also exchanged another group of ill and severely wounded servicemen on Saturday, officials from both countries said, although they did not report the numbers. Mr Zelensky said in a post on X that the Ukrainian servicemen who returned were members of the Armed Forces, the National Guard, the State Border Guard Service and the State Transport Special Service. The first round of the staggered exchanges took place on Monday. The agreement to exchange prisoners of war and the bodies of soldiers was the only tangible outcome of the talks in Istanbul on June 2. Continuing a renewed battlefield push along eastern and north-eastern parts of the 600-mile front line, the Russian Defence Ministry claimed on Saturday that its troops had captured another village in the Donetsk region, Zelenyi Kut. Russia launched 58 drones and decoys at Ukraine overnight into Saturday, according to the Ukrainian air force, which said its air defences destroyed 23 drones while another 20 were jammed. Russia's Defence Ministry said it shot down 66 Ukrainian drones overnight.
Belfast Telegraph
2 hours ago
- Belfast Telegraph
Zelensky warns oil price surge could help Russia's war effort in Ukraine
The Ukrainian president told journalists in Kyiv that the surge in oil prices threatens Ukraine's position on the battlefield, especially because western allies have not enforced effective price caps on Russian oil exports. 'The strikes led to a sharp increase in the price of oil, which is negative for us,' Mr Zelensky said. 'The Russians are getting stronger due to greater income from oil exports.' Global oil prices rose as much as 7% after Israel and Iran exchanged attacks over the past 48 hours, raising concerns that further escalation could disrupt oil exports from the Middle East. Mr Zelensky said he planned to raise the issue in a conversation with US President Donald Trump. 'In the near future, I will be in contact with the American side, I think with the president, and we will raise this issue,' he said. He also expressed concern that US military aid could be diverted away from Ukraine towards Israel during renewed tensions in the Middle East. 'We would like aid to Ukraine not to decrease because of this,' he said. 'Last time, this was a factor that slowed down aid to Ukraine.' Ukraine's military needs have been sidelined by the US in favour of supporting Israel, Mr Zelensky said, citing a shipment of 20,000 interceptor missiles, designed to counter Iran-made Shahed drones, which had been intended for Ukraine but were redirected to Israel. 'And for us it was a blow,' he said. 'When you face 300 to 400 drones a day, most are shot down or go off course, but some get through. We were counting on those missiles.' An air defence system, Barak-8, promised to Ukraine by Israeli President Benjamin Netanyahu was sent to the US for repairs but never delivered to Ukraine, he added. The Ukrainian president conceded that momentum for the Coalition of the Willing, a group of 31 countries which have pledged to strengthen support for Ukraine against Russian aggression, has slowed because of US ambivalence over providing a backstop. 'This situation has shown that Europe has not yet decided for itself that it will be with Ukraine completely if America is not there,' he said. The offer of a foreign troop 'reassurance force' pledged by the coalition is still on the table 'but they need a backstop, as they say, from America' Mr Zelensky said. 'This means that suddenly, if something happens, America will be with them and with Ukraine.' The Ukrainian president also said the presence of foreign contingents in Ukraine would act as a security guarantee and allow Kyiv to make territorial compromises, which is the first time he has articulated a link between the reassurance force and concessions Kyiv is willing to make in negotiations with Russia. 'It is simply that their presence gives us the opportunity to compromise, when we can say that today our state does not have the strength to take our territories within the borders of 1991,' he said. But Europe and Ukraine are still waiting on strong signals from Mr Trump. Without major US sanctions against Russia, 'I will tell you frankly, it will be very difficult for us', Mr Zelensky said, adding that it would then fall on Europe to step up military aid to Ukraine. In other developments, Russia repatriated more bodies of fallen soldiers in line with an agreement reached during peace talks in Istanbul between Russian and Ukrainian delegations, Russian officials said on Saturday, cited by Russian state media. The officials said Ukraine did not return any bodies to Russia on Saturday. Ukraine's Co-ordination Headquarters for the Treatment of Prisoners of War confirmed in a statement that Russia had returned 1,200 bodies. Ukraine and Russia also exchanged another group of ill and severely wounded servicemen on Saturday, officials from both countries said, although they did not report the numbers. Mr Zelensky said in a post on X that the Ukrainian servicemen who returned were members of the Armed Forces, the National Guard, the State Border Guard Service and the State Transport Special Service. The first round of the staggered exchanges took place on Monday. The agreement to exchange prisoners of war and the bodies of soldiers was the only tangible outcome of the talks in Istanbul on June 2. Continuing a renewed battlefield push along eastern and north-eastern parts of the 600-mile front line, the Russian Defence Ministry claimed on Saturday that its troops had captured another village in the Donetsk region, Zelenyi Kut. Russia launched 58 drones and decoys at Ukraine overnight into Saturday, according to the Ukrainian air force, which said its air defences destroyed 23 drones while another 20 were jammed. Russia's Defence Ministry said it shot down 66 Ukrainian drones overnight.
The Guardian
2 hours ago
- The Guardian
Israel's attack on Iran slows diplomatic momentum to halt Gaza war
In the hours after Israel attacked Iran, food shipments and distribution in Gaza stopped and a French-Saudi summit meant to pave the way for wider recognition of a Palestinian state was postponed indefinitely. International pressure over starvation and civilian killings in Gaza had apparently dissipated in little more than the time it took for the smoke of the first missile strikes to clear over Tehran. Israel's military moved fast to declare Iran its top priority, with the battle for Gaza relegated to second place. That shift was echoed in foreign ministries and newsrooms around the world. 'The fact that Israel attacked Iran doesn't mean [the war in] Gaza ended. Today we had dozens of people killed, the only difference is this will have far less attention than yesterday,' said Xavier Abu Eid, a political scientist and former adviser to the Palestine Liberation Organisation. 'Israel's message [with these attacks] is that there is no political solution for anything in the region. By striking Iran they want to sabotage the US-Iran negotiations as well as the international wave of support for concrete measures on Palestine.' The decision by Israel's prime minister, Benjamin Netanyahu, to take out the security threat posed by Iran's nuclear programme had also defanged a significant diplomatic and economic threat to his government. Some of Israel's closest allies in Europe had become increasingly outspoken about both the impact of the war in Gaza on civilians, and escalating violence by Jewish settlers against Palestinians in the occupied West Bank. Even historically strong alliances with countries such as the Netherlands and Germany had been faltering in the face of an 11-week siege of Gaza, UN warnings of a looming famine and repeated mass killings of hungry crowds trying to reach food distribution sites. The European Union last month announced a human rights review of its wide-ranging free trade deal with Israel, with findings originally expected at meeting of the bloc's Foreign Affairs council later this month. Its recommendations could pave the way for Europe to potentially leverage its considerable economic power as Israel's biggest trade partner, accounting for more than 30% of imports and exports. The UK, Canada, France and Norway this month imposed sanctions on two cabinet ministers 'for their repeated incitement of violence against Palestinian civilians', and warned other steps could follow. The Franco-Saudi summit on a two-state solution raised expectations that major European nations were preparing to unilaterally recognise a Palestinian state. It alarmed Israel and its allies in the United States so much that Washington issued a formal diplomatic warning against attending. For now, at least, that sense of diplomatic momentum that might halt the war in Gaza has gone. Even governments that have become more openly critical of Netanyahu's war in Gaza will be reluctant to press for its end while missiles from Tehran are killing people in Tel Aviv. 'Its regrettable that these attacks come at a time when there were interesting developments [on Palestine and the war in Gaza],' said one western diplomat. Emmanuel Macron said the attacks on Iran should 'in no way make us forget Gaza', and told journalists that the summit was only delayed for pragmatic security reasons. It would go ahead as soon as possible, he said, but could not set a date. In Gaza many people were oblivious to the war and all the diplomatic manoeuvring it had set off, because one of the longest communications outages of the war had plunged much of the territory into isolation. Phone and internet networks were down from Wednesday because of damage to key fibre-optic cables, the UN said. 'Since April, Israeli authorities have denied more than 20 requests to carry [urgent repair] work,' the UN aid coordination office said. That meant they could not see new evacuation orders posted by Israel's military spokesperson, or warnings that the war in Gaza would continue 'with extreme force'. They also could not access announcements from the Gaza Humanitarian Fund, the new US and Israeli backed organisation distributing some food in the strip from compounds guarded by the Israeli military. 'We were ordered to stand down,' the GHF said in a statement to international press. 'We have asked the IDF to facilitate the ongoing delivery of aid as soon as possible.' GHF only uses Facebook to communicate with Palestinians. So hungry, oblivious crowds approached centres on Saturday morning, as they had done since late May. Gunfire from Israeli soldiers killed at least 15 of them. Israeli attacks killed at least seven other people overnight, local health authorities said. There had been a decline in airstrikes, as the Israeli military shifted its focus to Iran. But on Friday an Israeli military spokesperson warned that operations there would continue 'with extreme force' and on Saturday new evacuation orders were issued. 'Famine worsens, the siege intensifies, and the dead are everywhere,' Al Jazeera journalist Anas al-Sharif wrote in a post on X, saying Gaza was 'immersed in complete isolation from the world'.
