Stocks get hit as war jitters fuel rush to bonds: Markets Wrap

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market such as bonds and the dollar. Oil rose. Equities saw their worst day since January after a news report that Israel was bracing for an attack by Iran on government targets.

Approximately 40 launches were identified crossing from Lebanese territory, some of which were intercepted, the Israel Defense Forces wrote in a post on X. US President Joe Biden said he expects Iran will attack Israel sooner rather than later — and his message to Iran is “don’t" do it. Wall Street’s “fear gauge" — the VIX — spiked to levels last seen in October.

To Matt Maley at Miller Tabak, investors have been much too complacent about geopolitical issues. “Since gold and oil have been pricing in a meaningful impact on the marketplace from this crisis, it’s not out of the question that the stock market will follow those other markets and see an outsized reaction before long," Maley noted. The S&P 500 fell 1.5% Friday, with banks and chipmakers leading losses.

The gauge posted its biggest weekly drop in 2024. Treasury 10-year yields sank seven basis points to 4.52%. Andrew Brenner at NatAlliance Securities also cited “massive short covering" and rate locking before an expected flurry of debt issuance by banks after earnings.

The dollar notched its best week since September 2022. Brent oil settled above $90. Gold topped the $2,400-an-ounce mark before erasing gains.

Treasuries rallied sharply, following the market’s worst two days since February, in which yields reached year-to-date highs after inflation readings savaged expectations for Federal Reserve interest-rate cuts this year. Two-year yields — which briefly topped 5% this week — plunged on Friday. “Risk was off the menu on Friday," said Fawad Razaqzada at City Index and Forex.com.