Stocks Retreat as Inflation Fears Push Bond Yields Higher

Oil and Energy Sector - WTI crude oil prices experienced volatility, initially rising by over 3% before falling back, influenced by geopolitical tensions in the Middle East and statements from President Trump regarding de-escalation of attacks on energy sites [1] - Iranian strikes have reportedly damaged 17% of the Ras Laffan LNG export capacity, leading to a more than 12% increase in European natural gas prices, reaching a three-year high [4] - The International Energy Agency (IEA) indicated that the ongoing conflict in Iran is disrupting 7.5% of global oil supply, with expectations of an 8 million barrels per day reduction this month [8] Economic Indicators - US new home sales fell by 17.6% month-over-month to a 3.25-year low of 587,000, significantly below expectations of 722,000 [2] - The Philadelphia Fed business outlook survey unexpectedly rose by 1.8 to a six-month high of 18.1, contrary to expectations of a decline [2] - Initial unemployment claims in the US fell by 8,000 to a nine-week low of 205,000, indicating a stronger labor market than anticipated [2] Stock Market Performance - Global stock markets are experiencing sell-offs due to rising bond yields and concerns over potential tightening of monetary policy by central banks in response to inflation risks from the Iran conflict [6] - Major US indices, including the S&P 500, Dow Jones, and Nasdaq, have fallen to 3.75-month lows, with the S&P 500 down by 0.43% [7][6] - The Magnificent Seven technology stocks are underperforming, with notable declines in Tesla, Amazon, Nvidia, and Meta Platforms [14] Central Bank Policies - The Bank of England (BOE), European Central Bank (ECB), and Bank of Japan (BOJ) have issued hawkish comments, warning that the Iran war poses inflation risks, which may lead to tighter monetary policies [5] - The ECB maintained its deposit facility rate at 2.00% while revising its 2026 Eurozone GDP forecast down to 0.9% from 1.2% and raising its inflation forecast [12] Company-Specific Developments - Five Below reported Q4 net sales of $1.73 billion, exceeding consensus estimates, and forecasted 2027 net sales between $5.20 billion and $5.30 billion [19] - Accenture's Q2 revenue of $18.04 billion surpassed expectations, leading to a more than 6% increase in its stock [19] - Rivian Automotive's stock rose over 3% following an investment announcement from Uber Technologies to support a robotaxi fleet launch [21]