The American stock markets already weakened significantly and recorded the fourth weekly decline in a row, while the main indices S&P 500, Nasdaq and Dow Jones fell between 1 and 2%. Negative sentiment among investors continues to be fueled by ongoing tensions in the Middle East – especially reports of a possible deployment of US ground forces in March. The price of Brent oil rose sharply to more than $111 per barrel. With the quarter's rise in price to $119, it raised concerns about long-term oil supply disruptions. The sale of US bonds then increased their yields, which increases pressure on sensitive sectors such as technology and utilities. The markets were also affected by the expiration of these two derivatives during the so-called quadruple witching. Gold fell 10.4% for the week, its worst week since 1983. This was mainly due to a stronger dollar and expected annual interest rates. By the end of the week, Bitcoin was trading around $68,200 per BTC. Learn more in the following paragraphs. American stock markets weakened significantly and recorded the fourth weekly decline in a row. Negative sentiment among investors continues to stem primarily from continued tensions in the Middle East. The main indexes closed in the red, especially after the reports about the possible deployment of US ground forces in the spring appeared. At the end of the last trading week, the S&P 500 index weakened by 1.5% to end at 6,508.32 points, the technological Nasdaq Composite lost 2% of its value and ended the fifth session at the end of 21,647.61 points, and the Dow Jones index fell by 1% at the end of 45 576.83 points. Over the past trading week, the S&P 500 lost a total of 1.9% of its value, the Nasdaq technology index and the Dow Jones index both fell by 2.1% over the past trading week. Since the beginning of the year, the S&P index is therefore down 4.9%, and the Nasdaq index even by 6.9%, and the Dow Jones index has fallen by 5.2% since the beginning of the year. What is currently affecting the specific financial markets? At the same time, the price of oil rose sharply, reaching the highest values in more than three and a half years. The markets were again dominated by a shift away from risky assets. Investors then sold US government bonds in large numbers, which led to a sharp increase in their income. Sectors sensitive to the development of annual rates, especially technology and utilities, felt the greatest pressure. The so-called quadruple witching event, which occurs four times a year, also contributed to nervousness on the markets. These types of derivatives – futures on indexes, options on indexes, stock options and futures on individual stocks – expire at the same time. This time, they asked for contracts with a total value of approximately 4.7 trillion dollars. According to recently published information, Pentagon officials have prepared detailed scenarios for the eventual deployment of US ground forces in spring. For example, Reuters recently reported that the US is sending thousands more Marines to the region. The sell-off of bonds, which began at the end of November after the US-Israeli flow to Iran, continued to strengthen. This led to further growth in yields and deepened pressure on stock markets. The yield on ten-year US bonds rose by 10 basis points to 4.384% and has already increased by 32 points since the beginning of the conflict. Two-year bonds added 6 basis points to 3.894%, while their yield increased by 42 points in the last month. The current development on the financial markets is therefore influenced by the rise in oil prices and the growth of bond yields. However, revenues then have a negative impact on sectors sensitive to annual rates. With the fact that expensive oil keeps geopolitical risks at the forefront of investors' interest, it is currently one of the most watched instruments for all market participants. However, at the beginning of this business week, i.e. after the close of Monday's session, the stock markets practically all over the world, including the British FTSE 100 index, did well for a long time. On the other hand, stock markets around the world closed the trading session again mixed. So where did oil prices and US government bond yields rise? Investors and businessmen are again resorting to cautious strategies, and the first signs of panic sales are appearing, which often precedes reaching the bottom of the market. Stabilization could then occur even at a time when the situation on the oil market calms down and ten-year bond yields stop rising. However, the price of Brent oil rose by 2.9% to 111.78 dollars per barrel by the end of the last trading week, and during the day it approached the level of 113.10 dollars per barrel. On Thursday, oil rose sharply even to 119 dollars per barrel, after Israel's flow on the Ji�n Pars gas field. He subsequently responded with attacks on key energy infrastructure in the region, including facilities in Qatar. These flows raised concerns about long-term supply disruptions, even if safe passage through the Strait of Hormuz could be re-established. Qatar said its export capacity had dropped by 17% after the Ras Laffan dam hit, and repairs could take up to five years. As a major supplier of gas to Europe, gas prices on the continent have risen sharply, increasing inflationary pressures. The US administration is trying to ease market concerns about the long-term rise in oil prices. US Finance Minister S. Bessent also indicated the possibility of releasing strategic oil reserves or easing sanctions on Greek exports. And how were other assets traded alongside gold? Gold lost 10.4% of its value for the entire past trading week, which is the worst result since 1983. With this decline lasting 8 days in a row. Gold futures were down 2.4% at the end of last week at $4,496.16 an ounce, and spot gold was down 3.4% at the end of last week at $4,494.44 an ounce. The fall in the value of gold is mainly driven by the strong US dollar and the prospect that annual interest rates will remain flat for some time. Added to this are concerns about inflation due to expensive oil, which subsequently helps reduce the attractiveness of gold. Central banks are therefore proceeding very carefully and are not in a hurry to reduce rates. Bitcoin was trading near $68,200 per BTC by the end of the week.
Petr �pirit has been dealing with current developments not only in the financial markets for more than nine years. As part of analytical activities, Bidli specializes primarily in the real estate and mortgage market, energy and investments. It is also devoted to stock commodity markets and monetary policy. He regularly publishes articles and analyzes on some of the industry's topics. He then worked for several long years at one of the well-known large brokerage companies. At the same time, he was at the birth of economic news and news.
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