Markets Dip as Trump Mulls Iran Strike; Brent Near $78, Gold Hits $3,372, DAX Falls 0.3%
Global markets edged lower Thursday amid fears the U.S. might enter the Israel-Iran conflict, with Brent crude near a 4.5-month high at $76.6 per barrel, gold up 0.1% to $3,372.36 an ounce, Germany's DAX futures down 0.3%, and S&P 500 futures off 0.1%.
Investors fled to safe havens while President Donald Trump fueled uncertainty, saying, "I may do it. I may not do it," regarding potential U.S. military involvement.
The Wall Street Journal reported that Trump approved attack plans but delayed action to see if Iran halts its nuclear ambitions. European equities pointed to a weak open. U.S. markets were mostly closed due to a national holiday. "Market participants remain edgy and uncertain," said Kyle Rodda of Capital.com. He warned that U.S. intervention would risk wider conflict and impact global energy and economic stability.
Middle East oil fears kept crude prices volatile. Though Brent eased slightly, it remained close to the $78.50 peak hit Friday. In Asia, Taiwan's benchmark fell 1.5% and Hong Kong's Hang Seng slid 2%. Gold and the U.S. dollar gained as investors sought safety, with the dollar firming against the euro and major Asia-Pacific currencies.
The Federal Reserve held interest rates steady overnight and signaled two cuts this year, defying Trump's push for easing. Chair Jerome Powell warned of inflation risks linked to Trump's tariffs. Analysts at MUFG criticized the Fed for underestimating economic fragility and labor market cracks. They warned that delaying cuts could force stronger action later.
Attention now turns to central bank decisions across Europe. Despite a report showing inflation cooling in Britain, the Bank of England is expected to hold rates amid Israel-Iran-linked oil shocks. Sterling was steady at $1.34. Swiss and Norwegian banks are also due to issue policy decisions.
In Japan, bond markets showed mixed moves. Long-term yields rose, while medium-term ones dipped after reports that Tokyo would cut super-long bond sales by 10% from prior targets. Markets remain tense, bracing for possible escalation in the Middle East.
(With inouts from agencies)
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