Global Stock Selloff Eases But Policy Makers on High Alert Over Energy Risk

Markets exhaled a bit during the Asian day at the end of another week of turmoil in the Middle East. The biggest monthly selloff in global stocks since 2022 moderated after President Donald Trump delayed his deadline for Iran to agree to a ceasefire deal by 10 days. US equity-index futures extended gains (before fading again), and Asian equities pared earlier losses.

But the costs of the war are hard to ignore. The MSCI All Country World Index was still headed for its worst month in more than three years as the Middle East conflict stokes concerns about inflation and lower economic growth. Australian and New Zealand bond yields pushed higher. And Japan’s super-long bond yields climbed as uncertainty persists over the prospects for a ceasefire in the Iran war, while a weaker currency and rising oil prices stoke stagflation worries.