Oil, gold surge on economic concerns

MSCI’s gauge of stocks across the globe also pared losses but was down ‌6.77 points, or 0.64%, to 1,049.99

Oil and gas prices surged while the dollar and safe-haven gold rallied on Monday as the U.S.-Israeli war against Iran widened and looked set to last for weeks, prompting worries that it could upend a global economic recovery and perhaps reignite inflation.

In response, global equity indexes underperformed U.S. stocks and Treasury yields rose on inflation fears.

Oil futures settled sharply higher after the Israeli and U.S. strikes on Iran and retaliation by Iran forced shutdowns of oil and gas ‌facilities across the Middle East and disrupted shipping in the crucial Strait of Hormuz, while investors ​worried about how long the war would last.

U.S. crude prices settled up 6.28%, or $4.21, at $71.23 a barrel while Brent settled at $77.74 per barrel, up 6.68%, or $4.87.

MSCI’s gauge of stocks across the globe also pared losses but was down ‌6.77 points, or 0.64%, to 1,049.99 at the end of the U.S. trading day. ⁠Earlier, the pan-European STOXX 600 index finished down 1.35%.

After earlier falling more ​than 1%, the S&P 500 managed to close very slightly higher with support from the energy, defence and technology sectors.

A lot of the worry today is about inflation and oil because of the war happening in the Middle East, said Lindsey Bell, chief investment strategist at 248 Ventures, adding that these concerns kept investors focused on U.S. equities where they saw greater certainty in earnings and economic growth than in other parts of the world.

In times of uncertainty, tech becomes defensive because it has the earnings growth, margin expansion and positive ‌cash flow that other sectors don’t have, Bell said.

Chris Zaccarelli, chief investment officer at Northlight Asset Management, said that ‌global markets were on edge but investors did not seem to be panicking or predicting a worldwide economic ‌collapse.