Oil prices hit two-week highs on Monday, driven by heightened geopolitical risks and potential supply disruptions. The U.S. defense secretary announced continued strikes on Yemen’s Houthis to prevent further shipping attacks, escalating investor concerns.
Brent crude futures rose by 1.4% to $71.54 per barrel, while U.S. crude matched the gain, reaching $68.12 per barrel. Despite some optimism about the potential end of the Ukraine war, which could lead to increased Russian energy exports, oil prices remained elevated due to persistent supply uncertainties.
European and Asian Markets Rally Amid Economic Optimism and Policy Developments
European stock markets posted gains, contrasting sharply with the struggling U.S. markets. The STOXX 600 index climbed 0.4%, marking a 7.6% rise for the year, in contrast to the S&P 500, which entered correction territory with a 4.3% decline. Investors were buoyed by Germany’s ambitious fiscal policy overhaul, featuring a €500 billion infrastructure fund.
The euro also strengthened, trading near five-month highs at $1.0897. A key parliamentary vote on Germany’s fiscal package is expected to further influence market sentiment.
Oil Prices Surge to Two-Week Highs as Geopolitical Risks Fuel Supply ConcernsAsian equities began the week on a strong note, supported by positive economic data from China. Retail sales growth in China accelerated in January-February, although new policy measures to boost domestic consumption had minimal impact on stocks. The offshore yuan remained stable at 7.2409 per dollar.
Meanwhile, South Korean and Japanese stock markets rose by 1.7% and 0.93%, respectively, reflecting optimism in the region. Despite concerns about global economic uncertainties, Asian markets demonstrated resilience.
U.S. Markets Struggle Amid Recession Fears and Global Investment Shifts
In contrast to global trends, U.S. stock futures signaled a weak start on Wall Street. Market sentiment remained bearish, weighed down by concerns over trade policy uncertainty and deteriorating consumer confidence. Treasury Secretary Scott Bessent warned of no guarantees against a potential U.S. recession, intensifying fears of an economic slowdown.
The S&P 500 and Nasdaq futures fell by around 0.2% in premarket trading. Investors are shifting away from U.S. assets in favor of European and Asian markets, a shift described as moving from “TINA” (There Is No Alternative) to “TIARA” (There Is A Real Alternative).
The U.S. dollar remained near five-month lows at 103.55 against a basket of currencies, down over 4% for the year as investors cut bullish positions. The yen gained slightly, with the dollar slipping 0.1% to 148.45 ahead of the Bank of Japan’s policy meeting, where interest rates are expected to remain unchanged. Meanwhile, gold prices held just below $3,000 an ounce after briefly surpassing that mark on Friday, signaling continued investor interest in safe-haven assets amid ongoing economic and geopolitical uncertainties.