Market Summary.. A wave of losses sweeps across various markets, while oil and the dollar go against the trend.

Global markets suffered sharp losses during trading on Thursday, as investor risk sentiment deteriorated due to escalating tensions in the Middle East, significantly increasing the demand for safe-haven assets. Markets are awaiting the release of the U.S. labor market data for September tomorrow, Friday.

Here are the key developments observed in various markets during today’s trading:

First: Global Stock Markets

U.S. and European stocks recorded sharp losses during today’s trading, amid growing market concerns regarding escalating geopolitical unrest in the Middle East. This followed U.S. President Joe Biden's statement that discussions are ongoing about U.S. support for Israel's military response to Iran in the upcoming period, which raised fears in the markets about the possibility of a regional war.

Additionally, the strength of the U.S. dollar and rising yields on U.S. Treasury bonds favored safe-haven assets and currencies, further contributing to downward pressures on U.S. stocks today.

Second: Major Foreign Exchange Markets

The U.S. dollar was the only winner in today’s trading in major foreign exchange markets, benefiting from its role as a safe haven during geopolitical fluctuations. This occurred alongside an increase in the ISM Services Purchasing Managers' Index for September to 54.1, the highest level since February 2023, reinforcing expectations that the U.S. Federal Reserve may not rush to cut interest rates aggressively in upcoming meetings.

This contributed to the increase of the U.S. dollar at the expense of its major currency counterparts; meanwhile, the British pound suffered a strong decline following Bank of England Governor Bailey's statement that the central bank would cut interest rates sharply if inflation weakness continues, emphasizing that cost-of-living pressures were not as persistent as feared by the Bank of England, which led to a sharp drop in the pound during trading.

Third: Major Commodity Markets

The rise of the U.S. dollar pressured gold prices today; while the precious metal attempted to secure gains, the appreciation of the dollar led to a decrease in gold prices denominated in greenbacks.

On the other hand, crude oil prices jumped to the highest level in a month after news reports revealed the possibility that potential Israeli strikes could target vital oil facilities in Iran, which could threaten supplies in energy markets since Iran is one of the largest producers and exporters of crude oil globally.