Oil Jumps, Global Stocks Slide as Middle East Tensions and Inflation Fears Rattle Markets

ERBIL (Kurdistan24) – Oil prices surged while global stock markets retreated on Tuesday as investors reacted to mounting uncertainty over the Middle East conflict and fears that inflationary pressures could intensify amid rising energy costs.

Market sentiment weakened after negotiations aimed at ending the regional war and reopening the Strait of Hormuz for tanker and cargo traffic appeared to stall. Iran’s chief negotiator warned that Washington must accept Tehran’s latest peace proposal or risk the collapse of ongoing diplomatic efforts, after US President Donald Trump said the fragile truce was close to breaking down.

The renewed tensions pushed crude prices sharply higher, with both Brent North Sea crude and US benchmark West Texas Intermediate climbing more than three percent.

The spike in oil prices also drove government bond yields upward, particularly in Britain, where political uncertainty deepened as Prime Minister Keir Starmer faced growing pressure to maintain his grip on power.

Britain’s 30-year government bond yield rose to 5.814 percent, its highest level since 1998, while the 10-year yield climbed to 5.135 percent, marking its highest point since the 2008 global financial crisis.

In the United States, newly released inflation figures added to investor concerns. The latest Consumer Price Index (CPI) data showed inflation was accelerating largely due to rising energy prices.

According to the US Bureau of Labor Statistics, annual inflation reached 3.8 percent in April, up from 3.3 percent in March and marked the strongest yearly increase in nearly three years.

Wall Street opened lower following the data release, with both the S&P 500 and Nasdaq Composite retreating from record closing highs reached a day earlier.

European stock markets also traded lower in the afternoon sessions, mirroring losses across parts of Asia.

In South Korea, the tech-heavy Kospi index dropped five percent after calls emerged for a new social tax targeting artificial intelligence profits. The proposal weighed heavily on major technology firms, including Samsung Electronics and SK hynix, despite recent gains fueled by the global semiconductor boom.