Iran has announced it will retaliate against the U.S. for its involvement in the ongoing conflict, intensifying geopolitical tensions. This development is contributing to rising bond yields, which are dampening equity demand. Additionally, surging energy prices, driven by these geopolitical risks, heighten concerns about inflation and the potential for stagflation in the U.S. economy.
The financial markets are reacting to these pressures, with the US100 index trading below the EMA200, indicating bearish sentiment. Resistance is noted around the 24,500 level, while support is identified near 23,800 and 23,500. The recent spike in oil prices, coupled with negative ISM data reflecting inflationary pressures, suggests that investors should brace for volatility as economic indicators may signal a downturn.
Market professionals should monitor these geopolitical developments closely, as sustained energy price increases could significantly impact both inflation and economic growth forecasts, influencing trading strategies and portfolio adjustments.
Source: xtb.com