By Sinead Caro and Yoruk Bahçeli
(Reuters) – The MSCI global stock index fell along with Treasury yields on Tuesday as investors shied away from riskier assets, while oil futures rose on concerns about supplies after Iran fired missiles at Israel.
However, Wall Street stocks finished above session lows, and Treasury yields also pared declines on hope that further escalation in the Middle East conflict is not imminent.
Earlier on Tuesday, Iran fired a barrage of ballistic missiles at Israel in response to the Israeli campaign against Hezbollah, Tehran’s ally in Lebanon. The United States condemned the Iranian move and said it was consulting with Israel about the response after US military forces helped Israel defeat the attack.
Gold and gold, traditionally safe havens, rose during the session to more than 1% as investors looked for less risky places to put their money. Oil prices rose as violence escalated, raising concerns about supply.
On top of geopolitical concerns, US investors are concerned about the effects of Hurricane Helen and the grounding of about half of US shipping due to a strike by dock workers on the East and Gulf coasts after a midnight deadline passed with no sign of a new contract agreement. With port owners.
Adding to the pressure on stocks, the Dow Jones and Dow Jones indexes ended Monday’s session at record closing levels.
“The markets were priced as perfect,” said Carol Schleif, investment director at BMO. “And then overnight we got some additional wrinkles in the mix. The port hit is one. The damaged infrastructure on the East Coast that was affected in the wake of Hurricane Helen is another example.” “. Family office in Minneapolis.
“Then add the third factor, which is Iran launching missiles at Israel,” Shalev said, noting that the attacks increased the dollar’s gains and created demand for Treasury bonds. “Investors were holding their breath, hoping it wouldn’t escalate.”
Oil prices settled higher although below their intraday highs. An Israeli attack on Iranian oil production or export facilities could cause physical disruption, perhaps more than 1 million barrels per day, said Clay Siegel, an independent political risk strategist.
Oil was up 2.44% at $69.83 per barrel and settled at $73.56 per barrel, up 2.59% on the day. Earlier in the day, both crude oil prices rose more than 5%.
On Wall Street, the Standard & Poor’s 500 index fell by 53.73 points, or 0.93%, to 5,708.75 points, and the index fell 278.81 points, or 1.53%, to 17,910.36 points.
The MSCI World Stock Index fell 6.09 points, or 0.71%, to 845.69. Earlier, the European index ended the day down by 0.38%.
The Chicago Mercantile Exchange’s Market Volatility Index, a gauge of fear on Wall Street, rose to 19.25 – its highest closing level since September 9.
In foreign exchange markets, the Japanese yen and Swiss franc, seen as safe haven currencies, rose as previous reports pre-empted attacks from Iran. The dollar also received support from data showing the flexibility of the US labor market on Tuesday, and Federal Reserve Chairman Jerome Powell on Monday retreated from bets on deeper cuts in interest rates.
The index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.45% to 101.20.
The euro fell 0.58% to $1.1069, and against the Japanese yen, the dollar fell 0.08% to 143.51 yen.
As investors looked for safety in US Treasuries, the yield on the benchmark 10-year US Treasury note fell 6.3 basis points to 3.739%, from 3.802% late Monday.
The yield, which typically moves in line with interest rate expectations, fell 4.3 basis points to 3.6084%, from 3.651% late Monday.
Referring to the conflict between Iran and Israel, Jim Barnes, director of fixed income at Bryn Mawr Trust in Berwyn, Pennsylvania, said: “We will wait and see, and hopefully this pause will continue and then the market will now change its interest again.” “For some morning data, which obviously has more and longer-term implications for returns.”
Precious metals, also seen as a safe-haven asset in times of uncertainty, were in demand on Tuesday. It rose 0.91% to $2,658.39 per ounce. US contracts rose 0.95% to $2,661.10 an ounce.