War, Inflation Fears Sink Stocks to 3-Month Lows

The conflict, involving Iranian and Israeli strikes on major gas fields, caused European natural gas prices to surge over +24% to a 3-year high following extensive damage reported at Qatar's Ras Laffan plant. Iran's threats to target energy infrastructure in Saudi Arabia, Qatar, and the UAE, coupled with the closure of the Strait of Hormuz, disrupted 7.5% of global oil supply, leading Goldman Sachs to warn crude prices could exceed $150 a barrel.

US economic data, including weekly initial unemployment claims falling -8,000 to a 9-week low of 205,000 and the Mar US Philadelphia Fed business outlook survey rising +1.8 to a 6-month high of 18.1, reinforced inflation concerns, driving the 10-year T-note yield to a 6.75-month high of 4.32%. Central banks, including the ECB and BOE, maintained hawkish stances, with the ECB cutting its 2026 Eurozone GDP forecast to 0.9% from 1.2% and raising its 2026 inflation forecast to 2.3% from 2.2%.