ISTANBUL

Global markets were mixed on Friday as renewed concerns over prolonged tensions in the Middle East outweighed earlier hopes for de-escalation, while persistent inflation worries kept bond yields elevated.

Conflicting remarks this week from US President Donald Trump and Iranian officials strengthened expectations that regional tensions may last longer, keeping pressure on investor sentiment. Although Trump said he had paused a decision to target Iran's power plants until April 6 and that talks were going well, disruptions in shipments through the Strait of Hormuz continued to fuel supply concerns in oil markets.

Continued fragility in energy supply kept oil prices elevated and reinforced fears that inflationary pressures could intensify, strengthening expectations that major central banks may keep policy tight for longer. The US 10-year Treasury yield, which climbed as high as 4.45%, stood at around 4.41%, reflecting sustained selling pressure in bond markets.

Fed Vice Chair Philip Jefferson said high energy prices could worsen inflation and create a difficult environment for policymakers, while also weighing on consumer and business spending. The Organization for Economic Co-operation and Development (OECD), meanwhile, left its 2026 global growth forecast unchanged at 2.9% but noted the figure still points to a slowdown from 2025, and trimmed its 2027 estimate to 3%.

The dollar index stood at 99.8, spot gold rose 1.9% to $4,460 an ounce, and Brent crude futures slipped 0.1% to $107.8 a barrel.

US markets under pressure

First-time jobless claims in the US rose to 210,000 in the week ending March 21, matching expectations. The S&P 500 fell 1.74%, the Nasdaq lost 2.38%, and the Dow Jones declined 1.01%, although index futures pointed to a firmer open on Friday.

Europe declines on inflation concerns

European stocks closed lower as persistent Middle East tensions and energy supply risks weighed on sentiment and reshaped expectations for the European Central Bank. Investors who had previously priced in a possible rate cut by year-end are now increasingly anticipating tighter policy.

Britain's FTSE 100 fell 1.33%, Germany's DAX 40 lost 1.5%, France's CAC 40 dropped 0.98%, and Italy's FTSE MIB 30 slipped 0.71%.

Asia mixed after China data

Asian markets were mixed as investors monitored both regional tensions and fresh data from China. Chinese industrial profits rose 15.2% in January-February, easing some concerns over deflation, while losses in US technology stocks spilled over into South Korea.

Near the close, Japan's Nikkei 225 was down 0.2% and South Korea's Kospi lost 1%, while China's Shanghai Composite rose 0.3% and Hong Kong's Hang Seng added 0.6%.