As the Israel-Hamas conflict continues and Powell makes his comments, the stock volatility reaches its highest level in six months, while bond rates reach their lowest point in 18 years.

Thursday saw an increase in caution in the financial markets, with volatility surging by approximately 10% to levels not seen in six months. The CBOE Volatility Index, also known as the “fear index,” closed at 21.40, a level last observed on March 27, 2023. The escalation of the conflict between Israel and Gaza had a negative impact on global risk sentiment, while a U.S. Navy warship intercepted three missiles fired from Yemen. The U.S. State Department issued a travel warning for all Americans. Bond performance continued to underperform, with yields rising following mixed messages from Fed Chair Jerome Powell. Equity markets also experienced a significant drop, with gold acting as a safe haven.