Key Takeaways
- Precious metals experienced a sharp sell-off, with Spot Silver plunging over 5% to $68.97/oz and Spot Gold dropping 2% to $4,556.90/oz.
- The Pentagon is deploying thousands of additional Marines and three warships to the Middle East following claims by Iran that recent strikes failed to halt its weapons production.
- UK 10-year Gilt yields surged 16 basis points to reach 5%, marking the first time the benchmark has hit this level since 2008.
- Market expectations for monetary tightening have shifted, with traders now pricing in a 50% chance of a Federal Reserve rate hike by October.
- President Trump criticized NATO allies as "cowards" on Truth Social, claiming they refused to join the military effort against a "Nuclear Powered Iran."
Precious Metals and Equities Retreat
Safe-haven assets saw a massive liquidation on Friday as Spot Silver fell more than 5% to trade at $68.97/oz. Spot Gold followed suit, extending its decline to 2% and settling at $4,556.90/oz after initially breaking below the $4,582 level earlier in the session.
The broader equity markets also faced downward pressure, with the Nasdaq 100 Index (NDX) extending its decline to 1%. Investors appear to be rotating out of growth stocks and commodities as yields rise and the U.S. Dollar strengthens against major peers.
Geopolitical Tensions Escalate in the Middle East
The Pentagon is sending thousands of additional Marines and three warships to the Middle East, according to reports from the Wall Street Journal. This move comes as Iran maintains that recent military strikes have failed to disrupt its weapons manufacturing capabilities.
President Trump intensified the rhetoric, labeling NATO members "cowards" for failing to join the U.S. in its military stance against Iran. Trump claimed that while the military conflict is "won," allies are now complaining about the high oil prices resulting from the instability. Meanwhile, China has urged all parties to prevent more nations from being drawn into the conflict.
Yields Hit Multi-Year Highs Amid Rate Hike Fears
Fixed income markets are reeling as the UK 10-year yield rose 16bps to reach 5%, a level not seen in eighteen years. This surge in yields is being mirrored by a shift in U.S. interest rate expectations, where futures are now pricing in a likely Federal Reserve rate hike for December.
The U.S. Dollar extended its gains against the Japanese Yen, rising 0.91% to 159.125 Yen. The Euro also struggled against the greenback, despite being up 0.51% at $1.152950, as the ECB signaled it is currently at a "neutral" rate of roughly 2%.
Legal and Diplomatic Developments
In South America, the New York Times reports that at least two U.S. Federal Prosecutors' offices are investigating Colombian President Gustavo Petro over alleged ties to drug traffickers. The probe is reportedly focused on whether drug money influenced political operations.
In Eastern Europe, President Zelenskiy announced that Ukraine expects to receive its first financial tranche from the European Union in April. Zelenskiy also urged European leaders not to ease sanctions against Russia and Belarus as the conflict continues.
Notable Passing
In cultural news, action icon and "Walker, Texas Ranger" star Chuck Norris has passed away at the age of 86. The news was confirmed by Variety, marking the end of a career that spanned decades in martial arts and cinema.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.