Middle East Conflict Persists, Global Stocks Slump, US Index Futures Narrow Declines, Gold Pulls Back After Breaking $5,400

TradingKey - Global equity markets (excluding China's Shanghai Composite Index) plummeted on Monday, while international oil prices recorded their largest single-day gain in four years. Safe-haven assets strengthened across the board, as the sharp escalation of tensions in the Middle East injects a new wave of uncertainty into global financial markets.

Brent crude futures surged nearly 12% at the open before paring gains to $78.37 per barrel, a rise of approximately 7.55% and the largest single-day jump since March 2022. Gold rose more than 2%, briefly breaking through $5,400 intraday, while silver followed with a 1.6% gain and the U.S. dollar strengthened by 0.6%. Futures for the three major U.S. stock indices fell in tandem, with some losses later narrowing.

Driven by safe-haven sentiment, the market saw an indiscriminate sell-off of global government bonds; prices for short-term and long-term U.S. Treasuries rose to varying degrees, while government bonds in most Asian countries also climbed during the Asian trading session.

The VIX, the market's fear gauge, surged to 25.24, its highest level since last November.

This geopolitical shock is compounding existing risks, such as uncertainty over the outlook for the AI industry and potential cracks in the private credit market, and is currently weighing on global asset pricing logic. Consequently, U.S. stocks recorded their largest monthly decline since April last month.