Ahead of a rate announcement, Japan’s Nikkei 225 plunged 2.4%, and as investors reduced risk, a broader measure of Asian markets also dropped more than 1.3%. Following Wednesday’s 1.4% declines in the S&P 500 and Nasdaq 100, US futures saw a little dip.
Concerns about a longer-term effect of the conflict were increased by strikes between Iran and Israel on vital energy installations, including damage to the largest LNG export plant in the world in Qatar, which caused Brent crude to rise above $111 per barrel.
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Following Federal Reserve Chair Jerome Powell’s statement that the Iran dispute has brought new uncertainty to the inflation outlook, making the path for interest rates more difficult to predict, Treasuries sold off across the curve on Wednesday, sending yields higher and boosting the dollar. Officials left rates unchanged and continued to expect one cut this year.
After rising 10 basis points to 3.77% during the previous session, the yield on two-year Treasuries stabilised on Thursday. Only roughly 15 basis points, or less than a quarter-point decrease, of Fed easing are being priced in by traders this year.
Fed officials increased their estimate of inflation in 2026 to 2.7% from 2.4% in economic forecasts that were made public along with their decision. Interestingly, the core measure, which does not include the volatile food and energy categories, also increased to 2.7%.
(Edited by : Juviraj Anchil)
First Published:Â Mar 19, 2026 6:25 AM IST
