US-Iran firefight in Strait lifts Brent above $100

An exchange of fire between US naval destroyers and Iranian forces in the Strait of Hormuz on Thursday sent Brent crude above $100 a barrel and prompted a broad market reaction ahead of Friday’s US nonfarm payrolls report. The incident overturned a brief easing in tensions and triggered profit-taking in risk assets.

Brent crude climbed back over $100 and was trading near its 50-day moving average around $99.80. West Texas Intermediate crude regained levels above $95. Traders pointed to renewed concern about potential disruptions to shipping and oil supply in the Gulf as the immediate driver of the price rebound.

US equity benchmarks slipped from recent highs. The S&P 500 fell about 0.4%, the Dow Jones Industrial Average dropped roughly 0.6% and the Nasdaq 100 edged lower. Large-cap technology names diverged, with Nvidia and Microsoft among the gainers. Asian markets reversed earlier advances, with the Nikkei 225 and Korea’s KOSPI each posting intraday losses near 1%.

Safe-haven flows supported the US dollar, with the trade-weighted dollar index holding near 97.95, a level that has acted as short-term support since mid-April. The Australian and New Zealand dollars weakened by about 0.4% and 0.3%, respectively. Spot gold stalled below a near-term resistance level around $4,775 per ounce. US Treasury yields moved sharply during the session: an initial drop on safe-haven demand was followed by upward pressure amid the prospect of sustained higher oil prices.

Market participants are splitting attention between the geopolitical flare-up and Friday’s US jobs report. Consensus forecasts expect nonfarm payrolls to rise by about 62,000 for April, down from March’s 178,000, while the unemployment rate is projected to hold at 4.3%. Traders will watch for any signs that stronger-than-expected jobs data combined with higher energy costs could affect inflation expectations and central bank decisions.

Interest-rate futures continue to price a high probability that the Federal Reserve will keep the target federal funds rate at 3.50%–3.75% through 2026. Futures also imply increased chances of policy moves by other major central banks in the coming weeks, including the European Central Bank and the Bank of Japan next month and potential action by the Bank of England and the Reserve Bank of New Zealand in July.

President Trump affirmed that the ceasefire remained intact after the exchange of fire, and US officials are discussing proposals to reopen the Strait of Hormuz. Iran’s formal response to the US proposals was still pending.

Technical indicators showed the Nikkei vulnerable to a short corrective pullback after an earlier rally. Analysts noted resistance around 62,795 and immediate support in the low 61,000s; a break below those levels could expose further downside toward the rising 20-day moving average.

Major energy importers in Asia, including Japan, South Korea and India, face a mix of reduced risk appetite and the prospect of tighter monetary policy overseas, factors that could affect growth and import bills if oil prices remain elevated.

Markets will closely monitor the US payrolls and unemployment figures for direction next week, and they will track developments in the Gulf for any signs of escalation or shipping disruptions that could sustain higher oil prices.