<ul>
<li>Global stocks mixed as oil prices stay around $100 a barrel</li>
<li>Investors focus on inflation risks</li>
<li>Traders rapidly cut Fed rate cut wagers for year</li>
<li>Dollar gains ground</li>
</ul>
(Updates to afternoon U.S. trading)
By Lawrence Delevingne and Lucy Raitano
BOSTON/LONDON, March 13 (Reuters) - Global stocks fell and oil prices stayed high on Friday as uncertainty over the Iran war continued to disrupt energy supplies, heightening concerns over fuel inflation and interest rates.
The price of oil hovered around $100 per barrel even as an Indian tanker sailed out of the Strait of Hormuz and the U.S. put forth measures to try and ease supply concerns.
Oil prices remain more than a third higher than when the U.S. and Israel launched strikes on Iran almost two weeks ago.
On Wall Street, the S&amp;P 500 (.SPX) fell 0.25% and the Nasdaq Composite (.IXIC) dropped about 0.6%.
The Dow Jones Industrial Average (.DJI) was little changed, but was hit the hardest this week, putting it on track for its biggest monthly losses since December 2024.
European shares extended their declines on Friday, with Europe’s STOXX 600 (.STOXX) down 0.5%. MSCI’s gauge of stocks across the globe (.MIWD00000PUS) fell 0.7%.
The dollar has become the safe haven of choice during the tumult, putting most other currencies under pressure. The U.S. currency was set for a second consecutive week of gains, up 0.6% on the day against a basket of other currencies (=USD) .
<h3>OIL PRICE DRIVING MARKET</h3>
President Donald Trump said the U.S. was going to be hitting Iran “very hard over the next week”, shortly after issuing a partial 30-day waiver for purchases of sanctioned Russian oil, hoping to ease prices fuelled by the U.S.-Israeli war on Iran.
Brent crude oil futures (LCOc1) rose to $101.47 a barrel, while West Texas Intermediate crude (CLc1) was at $96.77 a barrel. Both had hovered around $60 at the start of 2026.
Traders are trying to predict how long the disruption to oil supplies will last.
“Headlines are coming at the market like water from a fire hose, which is impacting the price of oil, and consequently, financial markets,” said Mitch Reznick, group head of fixed income at Federated Hermes.
With Iran stepping up attacks across the Middle East as its new Supreme Leader Mojtaba Khamenei vowed to keep the Strait of Hormuz shipping lane closed, investors are bracing for a prolonged conflict and higher oil prices.
The spectre of rising inflation has led markets to rapidly reprice what they expect from central banks this year, with traders now anticipating just 20 basis points of easing from the Federal Reserve compared to 50 bps of cuts priced in last month.
Two-year Treasury yields, which typically move in step with Fed interest rate expectations, hit a six-month high on Thursday.
Elsewhere, the Personal Consumption Expenditures index, the Federal Reserve’s preferred inflation gauge, rose 0.3% in January on a monthly basis, in line with economists’ estimates.
At the same time, U.S. economic growth slowed more sharply than initially thought in the fourth quarter amid downward revisions to consumer spending and business investment, government data showed on Friday.
“With markets laser-focused on oil prices and geopolitics, today’s numbers may mostly fly under the radar,” Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said in an email.
“Despite signs of economic softening, more sticky inflation data simply strengthens the idea that the Fed will remain on the sidelines.”
<h3>SHIFTING RATES OUTLOOK</h3>
Interest rate futures that had been priced for two quarter-point cuts by the end of the year before the conflict began are now barely pricing in one.
For U.S. government bond trading on Friday, the two-year note (US2YT=RR) yield fell 3.5 bps to 3.727% after hitting its highest level since August 22 on Thursday. U.S. 10-year notes (US10YT=RR) ticked up to 4.281%
Investor focus will switch to a slate of policy meetings next week, with the Fed, the Bank of Japan, the European Central Bank and the Bank of England all due to meet, with most expected to keep rates unchanged.
The Reserve Bank of Australia is broadly expected to hike rates next week.
In currencies, the euro (EUR=) fell 0.6% to $1.144, on course for a weekly decline of more than 1%.
The yen (JPY=) hit its weakest since July 2024 at 159.69 per U.S. dollar on Friday as Japan warned it was ready to take action to protect against yen declines. It was last at 159.59. (FRX/)
Analysts said the bar for intervention is higher this time around, as any action now could prove futile in the face of relentless dollar buying.
Gold (XAU=) was 0.6% lower at $5,047 per ounce on Friday, and was set for a drop on the week. (GOL/)

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- Global stocks fell as high oil prices and geopolitical tensions, particularly the Iran war, heighten inflation concerns.  
- Oil prices remained around $100 a barrel, impacting traders’ expectations of Federal Reserve rate cuts, now projected at 20 basis points rather than 50.  
- The dollar gained as a safe haven, while currencies like the euro and yen faced pressure amid market volatility.

GLOBAL MARKETS-Stocks dip, dollar strong as Iran conflict keeps oil prices high