Global financial markets swung through volatile trading on Thursday, driven by dual forces: escalating geopolitical tensions in the Middle East that pushed crude oil prices to a four-year high, and mixed signals from central bank policy and quarterly corporate earnings that left major stock indexes split across regions.
Crude prices surged more than 7% early in the session, lifting the international benchmark Brent crude to $126 per barrel—its highest level since Russia’s 2022 invasion of Ukraine—before retreating. By 1330 GMT, Brent had fallen 3.7% to $113.72 a barrel, while U.S. West Texas Intermediate crude dropped 2.5% to $104.23 per barrel.
The sharp run-up in energy prices stemmed from growing fears that Middle East hostilities will escalate and disrupt global oil supplies. Multiple sources confirmed to Axios that U.S. President Donald Trump is set to receive a briefing from U.S. Central Command head Admiral Brad Cooper on plans for potential new military strikes against Iran, while Trump has warned that an ongoing U.S. blockade of Iranian ports could extend for months. Negotiations over Iran’s nuclear program remain completely stalled, and Iran maintains full control over the Strait of Hormuz, the strategic waterway that carries roughly one-fifth of the world’s daily oil trade.
“With no sign of any peace talks and fears mounting about an escalation, oil prices have continued their gains,” Jim Reid, Deutsche Bank managing director, noted ahead of the price peak. “Investors are pricing in a more protracted conflict,” he added.
Beyond energy markets, investor attention remained fixed on major central bank decisions, one day after the U.S. Federal Reserve announced it would hold interest rates steady in the face of war-fueled elevated inflation. The European Central Bank and Bank of England followed the Fed’s lead on Thursday, also keeping rates unchanged. However, the ECB warned that risks to the eurozone’s growth and inflation outlooks have “intensified” due to Middle East tensions and energy supply disruptions, while the Bank of England downgraded its forecast for UK economic growth.
Fresh economic data released Thursday reflected the growing ripple effects of the conflict. Eurozone first-quarter growth slowed to just 0.1%, while U.S. gross domestic product expanded at a 2% annual rate—slower than analysts had projected—as consumer spending cooled. The Federal Reserve’s preferred inflation gauge also rose 3.5% in March, driven largely by spiking energy costs. Even with the slowdown, Briefing.com analyst Patrick O’Hare said the U.S. data reinforced confidence in the economy’s resilience despite rising prices.
On Wall Street, major U.S. stock indices opened higher and ended the day in positive territory, lifted by stronger-than-expected quarterly corporate earnings. The Dow Jones Industrial Average gained 0.5% to close at 49,108.93, the S&P 500 added 0.4% to 7,167.28, and the Nasdaq Composite rose 0.6% to 24,829.53. Big tech stocks delivered a mixed performance: Alphabet, Google’s parent company, saw shares jump more than 5% after investors praised the firm’s successful AI transition and strong revenue across core divisions, while Meta shares slumped more than 9% over concerns about its massive planned AI investment.
Overall, quarterly results have beaten analyst expectations by a wide margin, pushing the estimated average earnings growth for large U.S. companies from 15% to 26%, O’Hare said. “That is just massive, and it is the trajectory that has had the stock market looking confident in the face of the Middle East tumult and rising oil prices,” he added.
European markets were similarly split: London’s FTSE 100 rose 1.4% and Frankfurt’s DAX gained 0.8%, while Paris’s CAC 40 dipped less than 0.1%. Most Asian markets closed lower, with Tokyo’s Nikkei 225 falling 1.1% and Hong Kong’s Hang Seng Index dropping 1.3%; only Shanghai’s Composite index eked out a 0.1% gain.
In currency markets, the Japanese yen surged more than 2% against the U.S. dollar after Japan’s finance minister strongly signaled that Tokyo was prepared to intervene in currency markets to prop up the yen, which had fallen to its lowest level against the dollar since mid-2024. By the end of the trading window, the dollar fell to 156.69 yen from 160.23 yen on Wednesday.