Stocks fell and bonds rose on signs that Israel is preparing for a ground invasion of Gaza, prompting traders to seek refuge ahead of the weekend. Gold has increased the most since March. Oil prices increased.
The Nasdaq 100 dropped more than 1% as big tech stocks sold off. Boeing fell after announcing that it is investigating quality issues with the 737 Max aircraft. JPMorgan and Wells Fargo rose on the back of strong earnings. Treasury 30-year yields fell nine basis points to 4.76%, reversing some of the previous session's gains. The price of WTI crude oil surpassed $87 per barrel.
A sharper escalation of the Middle East conflict could pit Israel against Iran, a supplier of arms and money to Hamas, which the US and the EU have designated as a terrorist organisation. According to some economists, in that scenario, oil prices could reach $150 and global growth would fall to 1.7%, resulting in a $1 trillion drop in global output.
In early October, US consumers' year-ahead inflation expectations rose sharply, causing a sharp deterioration in Americans' views of their finances and sentiment. President of the Federal Reserve Bank of Philadelphia, Patrick Harker, stated that disinflation is underway and reiterated his preference for keeping interest rates unchanged, barring a significant change in data.