Oil Jumps Past $80 as US-Iran Strikes Rattle Markets
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- Brent crude futures rose 1% to $78.85 a barrel, up 9% for the week and crossing $80 for the first time since June 22, as the US military completed another round of strikes against Iran and Trump declared the interim agreement to end the war "over"
- Japan's Nikkei climbed 1.3% to break a three-day losing streak, while South Korea's KOSPI swung from a 4% rally to a 1% loss as gains in Samsung and SK Hynix faded on the semiconductor reversal
- Global bonds sold off sharply, with the 10-year Japanese government bond yield hitting 2.9% — its highest since 1996 — and Australia's 10-year yield scaling a one-month peak of 4.933%, while the benchmark 10-year US Treasury yield climbed to 4.5772%
- Fed funds futures now imply 38 basis points of policy tightening this year, back to where they were a week ago, after Fed minutes showed policymakers concerned about mounting inflation with some seeing a case to raise borrowing costs
- Nvidia rallied 3.6% after media reports that China plans to allow its top AI firms to buy a limited number of the company's H200 chips, giving Wall Street a boost with the Nasdaq gaining 0.2%
- Pepperstone head of research Chris Weston said the market remains "skewed towards the view that the (Iran) conflict ultimately de-escalates" around the memorandum of understanding, but cautioned the situation is "highly fluid"
Why it matters: Oil's 9% weekly surge and the bond rout — with Japan's 10-year yield at a 30-year high — have unwound rate-cut expectations and pushed Fed funds futures to price in 38 bps of tightening, directly raising borrowing costs for Asian governments and squeezing risk assets just as traders were pricing in a 2026 rate-cut cycle.
