Here's what Wall Street expects from financial markets after Iran's attack on Israel
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Financial markets will face fresh volatility as investors weigh the risk of a strike and counter-strike cycle following Iran's attack on Israel. Many expect oil prices to surpass $100 a barrel and anticipate a flight to safe-haven assets such as Treasuries, gold, and the dollar. Bitcoin initially dropped 9% but recovered to trade near $64,000. Stock markets in Israel, Saudi Arabia, and Qatar posted modest losses. The conflict in the Middle East could disrupt tanker shipments from the Persian Gulf through the Strait of Hormuz. Analysts suggest that the reaction of Israel and the US, as well as the escalation or de-escalation of the situation, will determine market impact. Investors and analysts are cautious, expecting risk assets to trade lower and seeking opportunities to buy at lower prices. The geopolitical situation will take precedence over central bank actions and the strong US economy in the coming days. The market impact may extend beyond the Middle East, affecting global inflation outlook and energy prices. The reaction of Israel and Iran will be crucial in determining the duration of the market rally or stall. The situation in the Middle East may influence the Federal Reserve's rate cuts and the decisions of the European Central Bank and the Bank of England. Traders will be monitoring the bond market for the impact of more expensive energy bills on inflation fears. Gold and the US dollar have seen increased demand as safe-haven assets. The market may see a rotation in favor of the US dollar. The events in the Middle East may lead to a more cautious approach to rate cuts by the Federal Reserve. The first rate cut is expected in September. The ECB and BOE are expected to cut rates in June, assuming energy prices remain stable. The market is uncertain, and the impact will depend on the reaction of Israel, the US, and Iran.

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https://fortune.com/2024/04/14/iran-israel-conflict-wall-street-outlook-financial-markets-stocks-oil-prices-bonds/