Equities: The S&P 500 slumped 1.2% to settle at 7,420, while the tech-heavy Nasdaq 100 dropped 1%. The Dow Jones Industrial Average suffered a 507-point drop (1.0%) to finish at 51,498, reversing an intraday gain of 0.5% recorded earlier in the morning session. Small caps shared the pain, with the Russell 2000 closing down 0.7%.
In today’s Asia opening session, the E-mini futures of the S&P 500 and Nasdaq 100 recovered by 0.8% and 1.4% reinforced by the official signing of the US-Iran interim peace deal by US President Trump.
Fixed Income: Sovereign bonds faced steep selling pressure as rate-cut bets were unwound. US Treasury yields climbed across the curve, pushing long-duration yields higher. Driven by the hawkish shifts, the benchmark U.S. 30-year fixed mortgage rate jumped to an estimated 6.62%, up from 6.54% the prior day.
FX: The U.S. Dollar Index caught an aggressive safe-haven bid in late New York trading following Warsh’s remarks. The euro and British pound gave up intraday gains and traded under pressure, dropping by 0.9% and 1% by the close of Wednesday’s session. The Japanese yen edged lower, remaining highly sensitive to widening yield spreads and trading near the recent intervention threshold of 160.65.
Commodities: Front-month international energy contracts inched lower in line with the broader risk-off equity slide, with Brent crude futures sliding 0.9% to near $78.66/bbl despite the IEA’s warning about inventory depletion. Spot gold fell 1.7% to settle near $4,258/oz after a bearish reaction below the 20-day moving average as surging nominal yields diminished the appeal of non-yielding safe havens.
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