On Friday, European stocks declined alongside U.S. futures as renewed concerns over oil supplies, sparked by the U.S.-Iran conflict, prompted traders to reassess their expectations for central bank interest rate cuts. Both global and U.S. benchmark oil prices climbed to their highest levels since mid-2024. The U.S. dollar advanced, while U.S. Treasury securities fell for a fifth consecutive day. Futures for the S&P 500 and the Nasdaq indexes dropped by 0.29% and 0.38%, respectively. The European STOXX 600 index declined by 0.15% during volatile trading, reversing an earlier gain of nearly 0.5% that had occurred when oil prices appeared to stabilize. Qatar Warns of Severe Jolt to Energy Markets Qatar's Energy Minister stated to a prominent UK financial media outlet that all oil-producing nations in the Gulf would halt exports within weeks, a move expected to drive oil prices to $150 per barrel and cause widespread economic disruption. The Chief Investment Strategist at The Wealth Club noted that the warning from Qatar's energy ministry about a prolonged war potentially stalling other economies has once again unsettled financial markets. The price of U.S. crude oil rose to $84.90 per barrel, its highest level since April 2024. Brent crude futures reached $87.66 per barrel, the highest level since July 2024. Traders Sharply Reduce Bets on Rate Cuts Money market traders betting on interest rate reductions now anticipate the U.S. Federal Reserve will cut rates by 35 basis points this year, down from expectations of around 55 basis points approximately one week ago. The yield on the 10-year U.S. Treasury note increased by 2 basis points to 4.17% on Friday. It is on track for a weekly gain of 20 basis points, which would be its largest increase since April 2025. However, Europe, which is more reliant on imported oil and gas, is experiencing the most significant impact. After abandoning previous bets on interest rate cuts from the European Central Bank, traders now believe the bank will implement a rate hike before the end of the year. Back in February, they had been anticipating two rate cuts. Regarding the Bank of England, traders now see only a 60% probability of a rate cut this year. A senior equity analyst at Robeco commented: As long as uncertainty persists, we expect market volatility to remain elevated. Stocks Under Pressure, Dollar Strengthens As the Middle East conflict impacts global markets, investors sought the safety of cash this week. They are realizing the war could last longer than initially anticipated. The U.S. dollar index rose 0.18% on Friday and is poised for a weekly gain of 1.6%, which would be its largest single-week increase in over a year. The MSCI World Equity Index has fallen 2.7% so far this week and is set for its largest weekly decline since March 2025. The MSCI's broadest index of Asia-Pacific shares excluding Japan fell 0.2%, with its weekly loss expected to reach 6%, marking the largest weekly drop since March 2020. The U.S. government is scheduled to release key data that could influence markets, including the Non-Farm Payrolls report. In other markets, spot gold held steady at $5,086 per ounce but is projected to register a 3% weekly decline.