Crude oil prices jumped sharply on Thursday after US President Donald Trump in his Wednesday's address announced renewed escalations against Iran, saying American forces would hit the country “extremely hard” over the next couple of weeks.
Asian stocks slumped as much as 1.7 per cent, reversing a recent rebound from their worst month in more than 17 years, after Trump’s comments undermined a nascent global market rally.
Equity indexes in the United States and Europe also fell more than 1 per cent as concerns grew that a prolonged conflict would keep oil prices elevated for several more weeks.
Brent Crude surged over 5 per cent to above $106 per barrel as uncertainty over the Strait of Hormuz continued for the fifth straight week.
US Treasuries declined, with the yield on two-year notes climbing four basis points to 3.84 per cent. Precious metals also tumbled, with gold falling 1.6 per cent to around $4,680 per ounce.
Trump’s latest speech triggered fresh uncertainty in global markets. Investors had been hoping for a more de-escalatory and market-friendly tone, but the President instead signalled intensified action against Iran for the next two to three weeks.
In the nearly 20-minute address, Trump did not outline any major shift in policy or provide new specifics on how military operations would proceed.
Nick Twidale, Chief Market Analyst at AT Global Markets, said, "Investors are clearly unimpressed, and I think we could see more downside for global markets today.”
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