Business
Up, or down? War scrambles financial markets’ signalling efforts | The Express Tribune
The Wall Street sign is pictured at the New York Stock Exchange in the Manhattan borough of New York City, New York, U.S., March 9, 2020. REUTERS
The traditional relationships between global financial assets have broken down since the outbreak of the Middle East conflict, leaving investors navigating markets with what analysts describe as a “faulty instrument panel”.
Despite geopolitical tensions and uncertainty over energy supplies and long-term economic damage, stocks on S&P 500 continue to hover near record highs, masking underlying stress across asset classes.
Strategists say the next few months are unlikely to resemble pre-conflict conditions.
“The growth factor is recovering, but remains below late-2025 levels, the rates (monetary policy) factor remains elevated, correlations are shifting, and drawdown risk is rising. Something new is forming,” said Mark McCormick.
Bonds fail stress test
Traditionally, stocks and bond yields move in opposite directions as investors hedge equity risks by buying bonds. However, that relationship has become increasingly erratic, particularly after the pandemic and now the war.
The International Monetary Fund had already warned before the conflict that investors may need to rethink risk strategies in a “new era” where traditional hedges fail.
Two-year bond yields—highly sensitive to inflation and interest rate expectations—have been at the centre of volatility. The rolling correlation between two-year US Treasury yields and the S&P 500 has plunged to around -0.8 from a five-year average of 0.23, and stands near -0.63 since the war began.
“There definitely wasn’t a move into sovereign fixed income in March, which, at least at the front end, you might have expected,” said Michael Metcalfe.
“This was a hard test for fixed income, because it was an inflation shock and also potentially a growth shock, which doesn’t help the long-term fiscal concerns,” he added.
Gold loses safe-haven appeal
Gold, traditionally a refuge in times of crisis, has also behaved unusually. Instead of rising, it has moved closely with equities and even cryptocurrencies, and remains about 10% below pre-war levels.
Its negative correlation with the US dollar has weakened to around -0.19 from a typical -0.4, while its correlation with stocks has climbed to about 0.55, more than double its five-year average.
Meanwhile, the inverse relationship between the dollar and stocks has strengthened sharply, with correlation hitting -0.94—an almost perfect inverse link.
Cryptocurrencies have also failed to provide diversification. Bitcoin’s correlation with equities has surged to 0.96 from about 0.4 before the conflict.
Currency signals blur
Currency markets have also defied expectations. Normally, higher interest rates in one region strengthen its currency, but that link has weakened.
The European Central Bank is expected to raise rates twice this year, while the Federal Reserve is leaning towards cuts. Yet the euro, trading near $1.17, has barely recovered from war-driven losses.
“Extraordinary events can have unusual effects on financial markets, often altering traditional relationships between financial variables,” analysts at UniCredit said.
They added that rate differentials are unlikely to regain their influence on euro-dollar movements until war-related risk premiums subside.
Inflation link breaks
Rising oil prices—typically associated with higher inflation expectations—have also failed to follow historical patterns.
Long-term US inflation expectations, measured through forward swaps, have edged down to about 2.4% despite oil prices remaining roughly 40% higher.
The correlation between oil prices and inflation expectations has flipped negative to around -0.7, compared to a five-year average of 0.2.
According to Deutsche Bank, this divergence may reflect expectations of rising US fiscal deficits as Washington funds the war, or a broader disconnect between inflation expectations and underlying fundamentals.
As a result, analysts warn that markets are increasingly “divorced from fundamentals”, complicating investment decisions in an already volatile geopolitical environment.
The federal government announced a Rs26.77 per litre hike in the price of petrol and high-speed diesel each on Friday, according to a notification issued by the Petroleum Division.
The new prices will be effective from April 25, 2026 for a week, the notification stated.
Following the increase, the price of HSD has jumped from Rs353.42 to Rs380.19, while the petrol price now stands at Rs393.35.
The government has been reviewing petroleum prices every Friday night following the now-paused US-Israel war on Iran, which began on February 28.
In the previous weekly review, the prime minister announced a reduction of Rs32.12 per litre in the price of high-speed diesel, while the petrol price remained unchanged.
The government jacked up petrol and diesel prices despite oil prices falling globally on Friday after it appeared a second round of Middle East talks was back on, bolstering prospects for an end to a war that has crippled energy shipments from the Gulf.
Oil prices had been climbing earlier as investors worried about a lack of progress in ending the Middle East crisis, with Tehran keeping the Strait of Hormuz closed and the US maintaining a blockade of Iranian ports.
But they dropped on reports that Iran’s Foreign Minister Abbas Araghchi was to arrive in Islamabad on Friday night.
Brent crude, the international benchmark contract, fell back below $100 a barrel.
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Powell’s term is nearing its end and the US Senate is considering Trump’s nominee for his replacement, Kevin Warsh. A key Republican, Thom Tillis, has withheld his support for Warsh unless the Trump administration would drop its investigation into Powell.
Business
Intel bags big gains! Chipmaker’s shares jump 26% on blockbuster results; how Trump admin benefits – The Times of India
Intel share price soared sharply on Friday after the chipmaker delivered a first-quarter performance that exceeded market expectations. And the win was not just for the chipmaker, but also the whole of US!The stock climbed 26.7% during trading on Friday, marking what could be its strongest single-day gain since 1987. Momentum continued after the closing bell, with shares rising a further 20% in after-hours trading as investors reacted to signs of a sustained turnaround driven by artificial intelligence.Intel reported revenue of $13.58 billion (€11.6bn) for the quarter, ahead of the $12.3 billion (€10.5 bn) forecast and up 7.2% from a year earlier. Adjusted earnings per share came in at $0.29, far exceeding expectations of $0.01.A key contributor to this performance was the company’s Data Centre and AI (DCAI) division, which delivered revenue of $5.05 billion (€4.2bn), up 22.4% year-on-year and well above analyst estimates of $4.41 billion (€3.77bn). The results indicate strong demand for Intel’s Xeon 6 processors and Gaudi 3 AI accelerators, particularly among enterprise clients and cloud service providers.Chief executive Lip-Bu Tan pointed to a broader shift in artificial intelligence usage as a major factor behind the growth. He said, “the next wave of AI will bring intelligence closer to the end user, moving from foundational models to inference to agentic.” He added, “This shift is significantly increasing the need for Intel’s CPUs and wafer and advanced packaging offerings.”The company also issued an upbeat outlook for the second quarter, forecasting revenue in the range of $13.8 billion (€11.8billion) to $14.8 billion (€12.6billion), surpassing investor expectations of $13 billion (€11.1billion).
But how is Washington winning?
The rally has had a direct impact on the US administration’s investment in Intel. In 2025, during a period of severe financial strain for the company, the administration of Donald Trump acquired a 9.9% stake in a move aimed at stabilising the business. The government invested $8.9 billion (€7.8bn) at a share price of $20.47 (€18.01), with $5.7 billion (€5bn) of that amount coming from previously approved but unpaid grants, according to the Euro News.At the time, Intel was facing multi-billion dollar losses and operational challenges, prompting concerns over its viability. As part of the intervention, the company cancelled planned factory projects in Germany and Poland, redirected focus towards US-based manufacturing, and reduced its global workforce by 25%, cutting around 25,000 jobs.Following the latest jump, Intel’s shares are now trading at $81.3 (€71.5), representing an increase of nearly 300% since the government first took its stake. The sharp rise highlights how the company’s improved financial performance has translated into substantial gains for the US administration.
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