The stock markets were rattled on Friday by the possibility of an imminent attack by Iran on Israel. Reports suggested that the attack could happen within hours or days, causing panic among investors. US intelligence authorities also indicated a likelihood of an attack, which further fuelled the uncertainty in the market.
The escalating tensions led to a surge in oil prices, with Brent crude rising sharply to over $92 in the afternoon before falling back to around $90 in the evening. The S&P500 index fell by 1.46 percent, while the Vix index, which measures market volatility, experienced a massive spike of around 25 percent – its largest single daily movement in over two years.
In response to the potential threat, Israel instructed its citizens on what to do in case of an attack. President Joe Biden expressed his concern about Iran’s actions and anticipated a possible strike on Israel. The uncertainty surrounding this situation had ripple effects on various financial markets, including interest rates on government bonds and gold prices.
Interest rates on US and German government bonds fell slightly due to the escalating tension. The US dollar also strengthened by 0.6 percent as investors sought safe-haven assets during these uncertain times. Despite these fluctuations, gold prices saw a significant increase as investors turned towards precious metals for protection against inflation and currency devaluation.
Overall, the markets remained volatile throughout Friday as investors grappled with concerns about a possible attack by Iran on Israel and its impact on global financial markets.
