Market Update – Friday the 13th Unlucky for the Markets?

Markets woke to a flurry of headlines this morning, as geopolitical tensions in the Middle East flared dramatically overnight. Risk assets are under pressure, oil has surged, and investors are flocking to safety.

Israel-Iran Escalation Dominates the Session

Israel launched a significant airstrike on Iranian military targets in what appears to be a direct response to suspected missile threats. The strike has rattled global markets, overshadowing central bank narratives and macroeconomic data.
U.S. equity futures turned sharply lower in pre-market trade. European bourses followed suit, with the FTSE 100 under pressure, while the DAX and CAC 40 both slipped further amid uncertainty over the potential for broader regional fallout.
Asian markets, already closed for the day, reacted earlier with the Nikkei 225 shedding 1.2% and the Hang Seng retreating 0.8%, underlining the breadth of the risk-off move.

Oil Surges as Supply Concerns Mount

WTI Oil surged to hit $77 a barrel, up nearly 10% intraday, as the market priced in the possibility of supply disruptions across the Strait of Hormuz one of the most critical global oil transit points. This sudden spike has revived inflation concerns just as central banks were beginning to feel more confident about easing price pressures.

Investors Seek Shelter in Safe Havens

As expected in times of geopolitical stress, money rotated quickly into safe-haven assets. U.S. Treasuries rallied, sending yields sharply lower. The 10-year yield fell below 4.10%, a notable move considering its recent upward trend.
Meanwhile, gold jumped to test potential key resistance level of $3450, and the U.S. dollar gained against most major currencies, notably the euro and pound. The Japanese yen also strengthened on haven demand

Looking Ahead

Investors will be closely watching for:

• Official statements from Iran, Israel, and major powers

• Further developments in energy markets

• Any shifts in tone from central banks, especially the Fed

Today’s events mark a sharp reminder that geopolitical risk, often discounted in the modern market, can reassert itself suddenly and dramatically. While this may prove a short-lived flare-up, volatility is likely to remain elevated into the weekend.

Summary

• Geopolitical shock has triggered broad-based risk aversion.

• Oil is surging, energy stocks rallying.

• Safe havens (gold, Treasuries, dollar) back in favour.

• Tech and defence holding up better than cyclicals and consumer names.

• Expect markets to remain on edge until tensions ease or become clearer.

Till next time, all of you trade safe!

By James Trescothick, Head of Market Research and Market Analysis

Risk Disclaimer: This information is for educational purposes only and does not constitute investment advice. Financial markets involve risks, and past performance is not indicative of future results. Always conduct your own research and seek professional advice before making investment decisions.