European Midday Briefing : Shares Extend Losses as Protracted Iran Conflict Looms -2-

Asian Government Bonds Fall as Middle East Conflict Stokes Inflation Fears

Asian government bonds sold off Tuesday as the Middle East conflict stoked fears of rising inflation driven by higher oil prices, which could lead to a faster pace of interest-rate increases by central banks across the region.

Yields on 10-year Japanese government bonds rose 6 basis points to 2.120% on Tuesday. Meanwhile, yields on 10-year Australian sovereign securities climbed 9 basis points to 4.7260%, while those on 10-year New Zealand government debt rose 5 basis points to 4.4000%. Yields move inversely to bond prices.

Bonds log biggest selloff in 9 months as Iran conflict sparks unusual Treasury moves

Investors reacted to the third day of the Iran conflict by dumping U.S. government bonds as oil prices spiked and Middle East hostilities stoked fears of an inflation resurgence.

Rapidly rising bond yields tend to unleash havoc on Wall Street. They can derail the stock market SPX, send a chill through capital markets and raise borrowing costs for households and businesses.

A Market Frenzy Is Lurking Beneath Those Calm Stock Indexes

The S&P 500 is clinging to an unremarkable yearly gain, up less than 1% in 2026. But at the single-stock level, swings have been violent.

Microsoft has slumped 18% this year, shedding well over half a trillion dollars in market value. TurboTax maker Intuit has lost 37%. Shares of the memory-chip manufacturer Sandisk have nearly tripled, meanwhile, while Texas Pacific Land, a real-estate company that has become a data-center play, is up 85%.

Why Oil Markets Can't Shrug Off This Conflict

The oil market has become used to quickly recovering from geopolitical threats. Could this time be different?

Brent crude futures have jumped 8% to roughly $78 a barrel after the Iran conflict began over the weekend. There are two scenarios that could cause a more severe and lasting impact on pump prices. One is a prolonged disruption to the flow of oil tankers through the Strait of Hormuz, through which about 20 million barrels a day of oil-or a fifth of global oil production-transits. Second is serious damage to the region's oil production or infrastructure, especially the kind that would disrupt spare capacity in Saudi Arabia and the United Arab Emirates.

Coal Prices Jump. It's Benefitting After the Strikes on Iran.

The conflict in Iran has upended the global market for oil and natural gas. It is also having a big impact on coal markets, even though coal isn't in the direct line of fire.

Coal prices measured in the Rotterdam market were up about 13% on Monday to $119.50 per ton, a 52-week high. Coal stocks also rose, with Peabody Energy up 6.6% and Core Natural Resources up 6.3%.

Minneapolis Prosecutors Probe Incidents Stemming From Immigration Crackdown

The Hennepin County Attorney's office in Minnesota is investigating more than a dozen incidents involving federal immigration officials that occurred during an enforcement surge targeting the Twin Cities.

Mary Moriarty, the Hennepin County Attorney, said Monday that her office was collecting and assessing evidence submitted by the public for any potentially criminal activity by immigration officials and agents during the operation, dubbed Operation Metro Surge.

Trump's Case for War With Iran Faces Growing Scrutiny

WASHINGTON-The Trump administration, in pressing its case for war with Iran, has made a number of accusations about the regime's threats to its neighbors, U.S. troops, and even the American homeland itself.

However, U.S. officials and lawmakers with access to classified information, along with experts who have spent their careers poring over public data and government reports, say the administration's assertions are incomplete, unsubstantiated, or flat-out wrong.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

03-03-26 0509ET