Middle East Conflict, Yields Drive Stocks to Fourth Weekly Loss

Ongoing conflict between Iran and Israel pushed WTI crude oil near $97.50 a barrel and Brent crude near $107 a barrel, intensifying global inflation fears. This caused the 10-year Treasury yield to surge to 4.38%, its highest level in months, as traders priced in a 60% chance of a rate hike by October, dashing hopes for imminent monetary easing.

The Federal Reserve held its benchmark interest rate steady at 3.5% to 3.75% earlier in the week, but its "dot plot" signaled only one rate cut for the remainder of 2026 and revised its 2026 PCE inflation forecast upward to 2.7% from 2.4%. This hawkish stance, combined with energy-driven inflation, has reset investor expectations.

Technology and Consumer Discretionary sectors led losses, while Energy showed relative resilience. Super Micro Computer (SMCI) plunged 26% due to federal smuggling charges, Newmont Corporation fell 7%, and Micron Technology tumbled 4%.

Conversely, Planet Labs jumped 29.4% and FedEx gained 10% on strong earnings and guidance. Gold rose 1.5% to $4,660 per ounce and silver surged 7.7% to $73.41, attempting a relief rally despite higher interest rates diminishing their appeal.

Bitcoin remained steady near $70,416. The near-term direction depends on geopolitical developments, particularly regarding the Strait of Hormuz, and upcoming economic data like PCE.