London Daily

Focus on the big picture.
Wednesday, Jul 08, 2026

Ukraine, inflation fears pummel US stocks but oil surges

Ukraine, inflation fears pummel US stocks but oil surges

With Brent touching $95 a barrel and West Texas Intermediate at $93.78, talk of $100 oil no longer seems far fetched.

Stocks dropped, while investors sought safety in Treasuries as the U.S. warned Russia could take offensive military action against Ukraine as early as next week.

Risk assets added to weekly losses as the U.K. and U.S. advised citizens to leave Ukraine as tensions with Russia rise. Oil spiked higher as a Russian attack could lead to harsh sanctions from the U.S. Russia has repeatedly rejected charges it plans to invade Ukraine.

The S&P 500 fell 1.9% and the Nasdaq 100 dropped more than 3%, following Thursday’s steep declines amid bets on faster Federal Reserve tightening. Treasuries caught bids, with the 10-year yield sinking 11 basis points to about 1.92%. Oil climbed, with brent crude hitting $95 a barrel for the first time since 2014.

For months, the U.S. has been warning European allies that Russia may be preparing to invade Ukraine, massing almost 130,000 troops near the border and staging the largest joint military drills in years in neighboring Belarus. The U.S. has warned of debilitating economic sanctions if Russia attacks, while the Kremlin says NATO expanding further east or deploying weapons in Ukraine are red lines.


A potential Russian invasion of Ukraine could not only disrupt crude supplies but also may spark retaliatory sanctions by the U.S. Oil prices have soared in recent weeks on speculation that demand will outpace supply as the global economy rebounds from the pandemic.

“The Russia/Ukraine news delivered another body-blow to markets, which were already reeling from stubborn inflation numbers and uber hawkish comments from Fed officials,” Cliff Hodge, chief investment officer for Cornerstone Wealth, wrote in a note. “We may have more downside risk over the coming weeks as markets react to headlines”

Friday’s selloff comes a day after a strong inflation reading and comments from a Federal Reserve official sparked a rout in equities and bonds. Odds increased for faster rate increases, with some traders speculating a hike may come even before the next regularly scheduled meeting in March. Those worries were effectively ended Friday when the Fed signaled it would go ahead with the last of its bond purchases before the program ends next month. The central bank has said it won’t raise until after the buys are over.

Inflation concerns weighed on U.S. consumer sentiment, which declined further in early February to a fresh decade low as views about personal finances deteriorated. The University of Michigan’s sentiment index dropped to 61.7, the lowest since October 2011, from 67.2 in January. Consumers expect an inflation rate of 5% over the next year, up from last month’s reading of 4.9% and the highest since 2008.

“Investors are worried that the economy is also slowing just at the worst time, just as the Fed is about to raise interest rates, which could threaten the health of this expansion and bull market,” said Sam Stovall, chief investment strategist at CFRA Research. “Add to it the geopolitical tensions and I think it’s very good reasons why we now have the volatility that we do.”

For more market analysis, read our MLIV blog.

Here are the main market moves:


Stocks


* The S&P 500 fell 1.9% as of 4 p.m. New York time
* The Nasdaq 100 fell 3.1%
* The Dow Jones Industrial Average fell 1.4%
* The MSCI World index fell 1.6%

Currencies


* The Bloomberg Dollar Spot Index rose 0.2%
* The euro fell 0.8% to $1.1341
* The British pound was little changed at $1.3551
* The Japanese yen rose 0.6% to 115.31 per dollar

Bonds


* The yield on 10-year Treasuries declined 11 basis points to 1.92%
* Germany’s 10-year yield advanced one basis point to 0.30%
* Britain’s 10-year yield advanced two basis points to 1.54%

Commodities


* West Texas Intermediate crude rose 4.3% to $93.78 a barrel
* Gold futures rose 1.5% to $1,864.60 an ounce

–With assistance from Sunil Jagtiani, Akshay Chinchalkar and Robert Brand.

Newsletter

Related Articles

0:00
0:00
Close
Rare Early Copy of US Declaration of Independence Found in British Archive
Cornish Language Revival Gains Momentum Through Schools and Community Programs
UK Authorities Face Criticism Over Prisoner Early Release Safeguards
Clacton By-Election Set After Nigel Farage Resigns Seat to Trigger Contest
Government Agencies Review Long-Term Fiscal Risks from Aging Population and Low Productivity
UK Heatwaves Expose Pressure on Public Transport and Housing Infrastructure
UK Government Prepares Welfare Review Amid Debate Over Personal Independence Payment Reform
UK Government Expands Rapid Endometriosis Testing Across NHS Services
Vistry Group Issues Profit Warning as UK Housing Market Faces Continued Pressure
Virgin Media Receives Record Twenty-Eight Million Pound Fine Over Contract Cancellation Failures
Office for Budget Responsibility Warns UK Public Finances Face Long-Term Pressure
UK Watchdog Warns Regional Income Gap Has Barely Narrowed in Three Decades
IMF Raises United Kingdom Growth Forecast as Inflation and Energy Pressures Ease
UK Government Launches Regulatory Reform Bill to Speed Up Commercialization of Innovation
Prince Harry Loses Privacy Lawsuit Against Daily Mail Publisher After High Court Rejects Claims
Federal Financial Framework Shifts as Treasury Launches Universal Savings Program for Minors
Jet2 Reports Strong Summer Travel Demand as Bookings Rise Seven Percent
Prince Harry Loses High Court Privacy Case Against Daily Mail Publisher
British Universities Warn Against Potential European Union Tuition Fee Changes
Heal Fertility Clinic Investigated After Embryo Biopsy Sample Mix-Up
Resolution Foundation Warns Regional Income Divide Has Barely Improved Since 1997
British Markets Remain Cautious as Middle East Tensions Rise and Government Transition Nears
Andy Burnham Poised to Become United Kingdom Prime Minister in Expected Political Transition
Nigel Farage Resigns as Member of Parliament Ahead of By-Election Amid Funding Investigation
Trump Declares Iran Ceasefire Over After Renewed Attacks on United States Bases
French Court Allows Le Pen to Run for Presidency, but with an Electronic Tag: "I Will Appeal, and I Will Run"
$1.4 Trillion: The Lawsuit That Could Crush Meta
Europe's Growing Struggle with Extreme Heat and Air Conditioning
UK Daily Briefing: Legal Developments and Social Issues
Political Turmoil and Rising Costs
Anthropic Reengineers Agentic Architecture to Shift Autonomous Workplace Automation to the Cloud
Logic Flaw in Windows 11 Permission Architecture Silently Consumes Hundreds of Gigabytes of Local Storage
Apple Advances Late-Stage Operating Systems with Fourth Beta Deployments
Global Crisis Alert: Escalating Middle East Tensions and UK Political Upheaval
UK Parliament Pushes for Greater Domestic Control Over Critical Technologies
UK Parliament Warns Trade Fair and Exhibition Industry Is Losing Global Competitiveness
Police Launch Murder Investigation After Mother and Two Children Found Dead Near Bedford
British Chambers of Commerce Survey Shows Business Confidence Falls to Post-Pandemic Low
UK Parliament Report Warns Britain Risks Falling Behind in Artificial Intelligence Sovereignty
Office for Budget Responsibility Warns United Kingdom Faces Long-Term Fiscal Pressures
Nigel Farage Resigns as Member of Parliament Amid Financial Scrutiny and Triggers By-Election
Deep Purple Has Released Its Best Album in Decades
UK MPs Criticise Student Loan System as Potentially Mis-Sold to Millions of Borrowers
Policy Groups Propose Bank of England-Backed Solar Loan Scheme for Millions of Homes
UK Health Agency Issues Amber Heat Alerts Across Six Regions as Temperatures Rise
Royal Air Force F-35 Jets Conduct First High North Air Policing Missions From Aircraft Carrier
Major UK Companies Join Government Cybersecurity Pledge Amid Rising Digital Threats
UK Sanctions Russian Operatives Linked to Chemical Weapons Programmes and Poisoning Cases
UK Government Expands Free Breakfast Clubs and Limits School Uniform Costs
UK Water Companies Face Tougher Penalties Under New Environmental Enforcement Rules
×