Stocks Slump on Iran War and Weakness in Chipmakers

Economic Outlook - The OECD raised its G-20 inflation forecast for 2026 to 4.0% from 2.8% due to the war in Iran [1] - The IEA reported that the war against Iran is disrupting 7.5% of global oil supply, with a potential cut of 8 million barrels per day this month [6] Labor Market - US weekly initial unemployment claims rose by 5,000 to 210,000, aligning with expectations, while continuing claims fell by 32,000 to a 1.75-year low of 1.819 million, indicating a stronger labor market than anticipated [2] Stock Market Performance - Stock indexes experienced a sharp sell-off, with the Nasdaq 100 falling to a 6.5-month low, driven by rising oil prices and geopolitical uncertainty regarding Iran [4] - The Magnificent Seven technology stocks, including Meta Platforms and Alphabet, saw declines, contributing to the overall market downturn [12] Energy Sector - Crude oil prices surged over 4%, influenced by geopolitical tensions and supply disruptions, with Goldman Sachs warning that prices could exceed $150 per barrel if the situation in the Strait of Hormuz does not improve [6] - Energy producers and service providers gained as WTI crude oil prices rose, with companies like Valero Energy and Occidental Petroleum seeing significant increases in stock value [14] Bond Market - The 10-year T-note yield rose by 9 basis points to 4.42%, pressured by rising inflation expectations due to higher oil prices and strong labor market data [3][9] - European government bond yields also increased, with the 10-year German bund yield rising by 11.6 basis points to 3.074% [10]