As Iran opened fire on Israel, stocks fell and safe-haven assets rallied as crude oil rose. By Reuters

Written by Sinead Carew and Yoruk Bahceli

(Reuters) – MSCI’s global stock index fell along with government bond yields on Tuesday as investors shunned risky assets while crude oil futures rose on supply concerns after Iran fired a missile at Israel.

But Wall Street stocks closed above intraday lows and Treasury yields also fell on hopes that further escalation of the Middle East conflict is not imminent.

On Tuesday morning, Iran fired a salvo of ballistic missiles at Israel in retaliation for Israeli operations against Tehran’s Hezbollah allies in Lebanon. The United States condemned Iran’s move and said it was consulting with Israel on a response after U.S. troops helped Israel repel the attack.

Roses and gold, traditionally safe havens, rose more than 1% during the session as investors looked for less risky places to put their money. Oil prices have rebounded as supply concerns rise as violence intensifies.

In addition to geopolitical concerns, U.S. investors feared the aftermath of Hurricane Helen and a strike by East and Gulf Coast dock workers after a midnight deadline without signing new contracts would disrupt about half of U.S. shipping. With the port owner.

And putting additional pressure on stocks, the Dow ended Monday’s session at a record high.

“The market was priced for perfection,” said Carol Schleif, BMO’s chief investment officer. “Then, overnight, several additional problems arose, the port strike being one of them, and the impact of the aftermath of Hurricane Helene.” East Coast infrastructure is another,” he said. Family office in Minneapolis.

“Then you add the third element of Iran launching missiles at Israel,” Schleif said, noting that the attacks boosted the value of the dollar and created demand for government bonds. “Investors are holding their breath, hoping the situation doesn’t escalate.”

Oil prices were formed higher than the highest of the day. Clay Seigle, an independent political risk strategist, said an Israeli attack on Iran’s oil production or export facilities could cause material disruption of more than 1 million barrels per day.

It was trading at $69.83 per barrel, up 2.44%, and at $73.56 per barrel, up 2.59% on the day. Both crude oil benchmarks were up more than 5% this morning.

On Wall Street, the stock closed at 42,156.97, down 173.18 points, or 0.41%, while the S&P 500 closed at 5,708.75, down 53.73 points, or 0.93%, and 278.81 points, or 1.53%, down at 17,910.36.

The MSCI World Stock Index fell 6.09 points (0.71%) to 845.69. Previously, the European index closed with a 0.38% decline.

CBOE’s Market Volatility Index (Wall Street’s fear gauge) rose to 19.25, the highest since September 9.

In foreign exchange markets, the Japanese yen and Swiss franc, considered safe haven currencies, strengthened their positions as they preempted an Iranian attack in previous reports. Data on Tuesday showing the resilience of the U.S. labor market and Federal Reserve Chairman Jerome Powell’s reluctance to bet on deeper interest rate cuts on Monday also helped the dollar.

The yen, which measures the dollar against a basket of currencies including the yen and euro, rose 0.45% to 101.20.

The euro was trading at $1.1069, down 0.58%, while the dollar was down 0.08% against the Japanese yen at $143.51.

The benchmark U.S. 10-year yield fell 6.3 basis points to 3.739% from 3.802% late Monday as investors consider the safety of U.S. Treasuries.

The yield, which generally moves in line with interest rate expectations, fell 4.3 basis points to 3.6084% from 3.651% late Monday.

On the Iran/Israel conflict, Jim Barnes, director of fixed income at Bryn Mawr Trust in Berwyn, Pa., said: “These are definitely some of the morning data that have a larger, longer-term impact on yields.”

The precious metal, considered a safe haven asset in times of uncertainty, was in demand Tuesday. It rose 0.91% to $2,658.39 per ounce. The US rose 0.95% to $2,661.10 an ounce.