ISTANBUL — Global financial markets experienced volatility last week as escalating tensions in the Middle East continued to unsettle investors, while attention shifted toward upcoming key economic data from the United States.
The conflict—triggered by U.S. and Israeli strikes on Iran and subsequent retaliatory actions—has now entered its second month, creating significant pressure on global energy, food, and commodity prices, while also disrupting supply chains.
Geopolitical Risks Keep Market Volatility High
Conflicting statements from the parties involved in the conflict contributed to a mixed performance across global markets. The ongoing uncertainty has kept risk perception elevated, with investors closely monitoring developments in the region.
Rising energy prices and supply concerns have further complicated market pricing, increasing inflationary pressures worldwide and adding to investor caution.
Fed Signals “Wait-and-See” Approach
Federal Reserve Chair Jerome Powell indicated that the central bank is adopting a cautious stance amid geopolitical uncertainty. Speaking at a recent event, Powell emphasized that policymakers are in a position to “wait and see” how developments unfold.
He noted that while inflation expectations remain relatively anchored in the longer term, the Fed faces a delicate balance between supporting the labor market and containing inflation risks.
Other Fed officials echoed similar views, suggesting that current monetary policy remains appropriately positioned, with flexibility to adjust interest rates depending on economic conditions.
U.S. Markets Show Resilience
Despite geopolitical tensions, U.S. stock markets ended the week on a positive note, supported by signs that the conflict might not escalate further in the near term.
- The S&P 500 rose by 3.4%
- The Nasdaq gained 4.4%
- The Dow Jones Industrial Average increased by 3%
Meanwhile, U.S. Treasury yields declined slightly, and the dollar index edged lower. Oil prices remained elevated, while gold rebounded after several weeks of decline, reflecting continued demand for safe-haven assets.
Key U.S. Data in Focus
Investors are now turning their attention to a series of critical U.S. economic indicators expected in the coming days, including:
- Durable goods orders
- Federal Reserve meeting minutes
- Core personal consumption expenditures (PCE)
- GDP growth data
- Consumer inflation and confidence figures
These data releases are expected to provide further insight into the trajectory of the U.S. economy and influence future monetary policy decisions.
Europe and Asia React to Energy Concerns
European markets also posted gains, though energy prices remained a key concern. Officials warned that Middle East tensions have caused significant fluctuations in energy markets, increasing import costs across the region.
In Asia, markets showed a mostly negative trend (excluding Hong Kong), driven by fears over energy supply disruptions and the strategic importance of the Strait of Hormuz for regional economies.
Source: Patronlar Dünyası/ Prepared by: İlayda Gök