Global Markets Volatile on Iran Strikes, Dollar Hits Multi-Year Lows

Global markets experienced significant volatility driven by geopolitical tensions in the Middle East and shifting monetary policy signals from Federal Reserve officials. Following initial fears of Iranian disruptions to oil supply via the Strait of Hormuz, oil prices surged early in the week but then plummeted more than 7% by the close, reflecting relief that oil shipments remained uninterrupted. Stock markets rebounded with major indexes like the MSCI World and Nasdaq 100 hitting new highs, supported by strong corporate earnings such as Uber's robust Q1 revenue growth and Carnival's raised earnings guidance. The U.S. dollar weakened to multi-year lows against the euro and sterling, amid speculation about who was selling the dollar and dovish Fed remarks, including the possibility of a rate cut as soon as July. Investors also noted sector-specific moves, with tech stocks gaining and real estate declining, while bond yields fell, steepening the yield curve. These developments underscore a complex environment where easing Middle East tensions and Fed policy perspectives drive risk-on sentiment despite persistent uncertainties.