Market developments
Equities: Global equities came under pressure as escalating tensions involving Iran pushed oil prices above $100 per barrel and revived concerns around stagflation. In the U.S., the S&P 500 declined 0.6% to 6,632.19 on Friday, marking its weakest close since November 21, while the Nasdaq 100 lost 0.5%, with notable weakness in names such as Adobe and Meta. Canadian equities also moved lower, with the S&P/TSX Composite falling 0.9% to $32,541.93, extending its losing streak to three sessions and bringing the cumulative decline to more than 700 points.
Fixed Income: Bond markets were shaped by competing inflation and growth signals over the week. In the U.S., the 10-year Treasury yield started the week lower on Monday but moved higher over the following days to finish at 4.3% on Friday as the rise in oil prices renewed inflation concerns. Long-end yields also moved higher, with the 30-year Treasury yield ending at 4.9%. In Canada, government bond yields eased on Friday, with the 10-year Government of Canada yield closing at 3.5% and the 30-year yield at 3.9%.
Commodities: Markets were dominated by the sharp rise in energy prices as the conflict involving Iran disrupted shipping through the Strait of Hormuz. Brent crude rose to $103.69 per barrel posting a weekly gain of about 11.87% and closing above $100 for the first time since August 2022. Gold was weaker, with spot prices near $5,019 per ounce on Friday, heading for a second straight weekly decline as a stronger U.S. dollar and reduced rate-cut expectations offset safe-haven demand.