The lack of detail on damage in early dispatches had traders pulling back some of their flight-to-safety moves but the volatility was hardly comfortable heading into the weekend.
It’s unsettling because it dovetails with other negative developments for markets during the week and has renewed a rally in commodities that is going to add to inflationary pressure.
Iran is the third-largest OPEC oil producer and pumps 3% of total world output. Oil is up 16% in 2024. Copper, an industrial metal, is up 14%.
On Thursday, New York Fed President John Williams gave voice to a risk for which markets are ill-prepared: “If the data are telling us that we would need higher interest rates to achieve our goals, then we would obviously want to do that,” he said.
U.S. Treasury yields dropped sharply on Friday but benchmark 10-year yields are up more than 35 basis points for the month as expectations for rate cuts this year evaporate.
Shares in Taiwanese chipmaking behemoth slid 6% as it disappointed investors by lowering its outlook for the sector, dragging down tech and chipmaking shares globally.
Knee-jerk gains for the yen and Swiss franc, particularly on crosses, show markets are on a hair trigger to unwind carry trades that can sour quickly in volatile conditions.
Second-tier data due later in the day is likely to be overshadowed by geopolitics.
