US military strikes on Iran triggered a sharp surge in international oil prices and US Treasury yields, according to analysis from iM Securities released on the 11th. The attacks reversed the downward trend in crude oil markets, with West Texas Intermediate (WTI) prices jumping from the $68 per barrel range to $74, briefly exceeding $76 on the 8th. The oil price spike reignited inflation concerns, driving the US 10-year Treasury yield to 4.57% from the 4.3% range—approaching the post-conflict peak of 4.6663% recorded on May 19. iM Securities analyst Park Sang-hyun warned that bond market sensitivity to inflation risks poses renewed threats to financial and asset markets, even as equity markets remained stable following President Donald Trump's statement that events would end quickly.
WTI Crude Oil Prices Jump from $68 to $74 Per Barrel Following Iran Strikes
West Texas Intermediate crude oil prices, which had shown a downward stabilization trend, surged significantly after the US military strikes on Iran. WTI prices that had fallen to the $68 per barrel range jumped to the $74 level. During trading on the 8th, prices exceeded $76 per barrel.
Equity Markets Remain Stable While Bond Markets Show Sensitivity
Financial markets excluding bonds did not treat the situation as severe. President Donald Trump stated that "whatever happens will end very quickly." The US dollar and Nasdaq index maintained strong stability, while the Philadelphia Semiconductor Index actually rebounded.
The bond market showed a more sensitive reaction. The US 10-year Treasury yield, which had fallen to the 4.3% range amid declining oil prices, surged again to 4.57%. This level approaches the post-US-Iran conflict peak of 4.6663% recorded on May 19.
iM Securities Analyst Warns of Inflation Pressure and Market Instability Risks
Park Sang-hyun, a researcher at iM Securities, analyzed that the yield increase reflects inflation concerns stemming from rising oil prices. He noted that Federal Open Market Committee (FOMC) minutes from last month showed hawkish voices were not stronger than concerns, and while some opinions for rate increases were raised, all participants supported maintaining rates.
"Even though the Federal Reserve alleviated rate hike concerns, Treasury yields rose, reflecting inflation worries due to oil price increases," Park stated. He added that the 10-year Treasury yield level approaching the previous high of 4.6663% is burdensome for financial markets, warning that vigilance is needed against the possibility of renewed expansion of instability in financial and asset markets due to further yield increases.
FAQ
What caused US Treasury yields to surge to 4.57%?
The US 10-year Treasury yield jumped to 4.57% from the 4.3% range following US military strikes on Iran. The surge reflected market concerns that rising oil prices—WTI crude jumped from $68 to $74 per barrel—could reignite inflation pressure.
How did equity markets react to the US-Iran military strikes?
Equity markets remained stable despite the strikes. The US dollar and Nasdaq index maintained strong stability, and the Philadelphia Semiconductor Index rebounded. President Donald Trump's statement that events would end quickly contributed to the calm market response.
