Thursday was a risk-off session concentrated in mega-cap technology and rate-sensitive names rather than in the broad market. The S&P 500 fell 1.2% to 7'408, the Nasdaq Composite 2.2% to 25'138 and the Dow Jones 1.0% to 51'712, while the equal-weighted S&P 500 lost only 0.4% and the Russell 2000 0.7%, placing the damage squarely in the largest index weights; the VIX rose 12.4% to 18.7.
Europe closed lower across the board, the STOXX 600 down 1.2% at 639, the FTSE 100 down 0.7% at 10'639 and the SMI down 0.7% at 14'215.
Asia extended the move overnight, the Nikkei 225 closing 2.7% lower at 64'611, the Hang Seng down 1.3% at 24'885 and the Shanghai Composite down 1.6% at 3'814.
The trigger was an energy-led inflation shock layered on hawkish central bank rhetoric, after fresh US strikes on Iran and Houthi attacks on Saudi tankers in the Red Sea, with the ECB holding its deposit rate at 2.25% and Lagarde read as opening the door to a September hike. Treasuries sold off for a fourth session, the 2-year ending at 4.37% and the 10-year at 4.71%, its highest since January 2025, while Swiss rates followed only marginally, the 10-year near 0.5% and the 2-year close to 0.2%, with SARON pinned at the SNB's 0.0% policy rate.
Brent surged 7.0% to 100.69 dollars, above 100 for the first time since late May, while gold fell 2.0% to 4'049 dollars as higher real yields outweighed the geopolitical bid.
