Asian markets remained bearish on Friday, while oil prices rose on fears that Israel's expected ground attack on Gaza could spread to the Middle East.
Federal Reserve Chairman Jerome Powell added to those concerns when he hinted at holding interest rates at the bank's next meeting, but left open the possibility of further hikes later, according to the AFP news agency.
Traders are keeping a fearful eye on the situation in the Middle East as Israel bombards Gaza after an October 7 attack on Israel by Gaza's ruling party Hamas killed 1,400 people.
More than 3,700 Palestinians have been killed by Israel's constant bombardment of Gaza, while the situation has become more tense with the bombardment of the hospital yesterday. Both sides blamed each other for this attack. Meanwhile, Iran has threatened to join the war if Israel launches a ground attack on Gaza, raising fears that the entire region could be engulfed in a wider conflict.
Observers believe that there is a clear possibility of such a situation arising.
On the other hand, the Pentagon said in a statement that the US Navy shot down missiles and drones in the Red Sea on Thursday that were likely fired at Israel by the Iran-backed Houthi rebels in Yemen, which is in the midst of tensions. There is a sign of other countries joining.
Oil prices rose and profits extended on fears of an outbreak of war in the Middle East, which led to a 1 percent rise in oil trade in Asia.
Vandana Hari, head of Vandana Insights, said that the risk premium in crude oil has increased once again, as long as the tension between Hamas and Israel continues to rise, further increases in crude oil prices will increase on fears of tension. The threat of will remain'. Traders, meanwhile, are mixed on the prospect that US interest rates will remain high for some time as the Fed tries to tame inflation.
On Thursday, Jerome Powell suggested policymakers hold off on raising interest rates until the next meeting at the end of October, but left room for further policy tightening. Weekly jobless claims came in lower than expected, indicating that the labor market remained tighter than forecast, denting the confidence of many traders.
Speaking at a conference in New York, Jerome Powell said that 'inflation is still very high and a few months of good data is just the beginning of the impression that inflation is on the way down to our target permanently. Confidence will be restored'. Additional evidence of a sustained trend of above-trend growth or fresh signs of tightening in the labor market could warrant further tightening of monetary policy, the report said.
His comments echoed among his colleagues on the policy board, which is also focusing on incoming data.The yield on the 10-year Treasury note, a proxy for US interest rates, has now risen more than 5% since 2007.
That weighed on U.S. markets as all three major indexes lost between 0.8 and 1 percent. Asian markets have followed suit and now Tokyo, Hong Kong, Shanghai, Singapore, Taipei, Manila and Jakarta are all at risk. Sydney, Wellington and Seoul were further down by one per cent
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