Big losses in New York and a big rise in oil – interest rates are slow to fall

Major stock market indices in New York closed with significant losses, while a jump in oil prices was observed, on the one hand because investors now consider that estimates of an immediate cut in interest rates may have been exaggerated and on the other hand due to geopolitical developments taking place in the Middle East.

Rising bond yields also contributed to the decline in stocks. The yield on US 10-year bonds jumped to nearly 4% from 3.80% a week ago.

The Dow Jones Industrial Average fell 284.85 points, or 0.76%, to 37,430.19 points, while the broader Standard & Poor's 500 index fell 0.82% to 4,704.07 points, ending three consecutive sessions of decline.

The pressure was greater on the Nasdaq index, which fell 173.73 points, or 1.18%, to 14,592.21 points, completing four consecutive days of losses.

Meanwhile, oil prices rose sharply after the massacre in Iran during the annual memorial ceremony for the Supreme Leader of the Revolutionary Guards. This development led to the return of fears of escalating tension in the Middle East and the possibility of interruption of market supplies.

This development raises concerns that Iran is now likely to carry out its threats to close the Strait of Gibraltar, creating greater problems in transporting goods and fuel, and to intensify its support for the Houthis in Yemen, whose numbers are already growing. Attacks on ships crossing the Red Sea have forced many shipping lines to choose longer and more expensive alternative routes, causing delays in the delivery of goods.

Concerns are heightened further after reports that Libya's largest oil field is reducing production as it has been blockaded by demonstrators who threaten to continue the blockade until the government meets their demands.

Brent crude rose by 3.44% to $78.50 per barrel, while US crude closed at $73.08 per barrel, up by 3.84%. The decline was also significant for gold, which was below $2,050 per ounce.