Oil surges, stocks tumble as Trump declares Iran MOU 'over'

By Amanda Cooper and Tom Westbrook

LONDON, July 8 (Reuters) - Oil surged by much than 5% connected Wednesday and planetary stocks and enslaved prices tumbled, arsenic investors fled hazard assets aft U.S. President Donald Trump said the memorandum of knowing signed with Iran to extremity the ‌Gulf struggle was "over".

Trump, who was speaking successful Ankara up of a NATO acme successful the Turkish capital, added that helium did not privation ‌to prosecute with Tehran. "As acold arsenic I'm concerned, it's conscionable a discarded of clip dealing with them," helium said.

Market sentiment was already fragile aft U.S. and Iranian forces had traded attacks successful the ​Gulf.

Brent crude futures leapt 5%, the astir successful a time since precocious May, to $78 a barrel.

While that was good shy of the peaks supra $120 seen during the tallness of the fighting, it was capable to inject immoderate caller ostentation hazard into the enslaved market, peculiarly since months of struggle person drawn down planetary lipid inventories.

"It's intelligibly not what the market's wanted and it truly weighs heavy connected sentiment," Chris Beauchamp, main marketplace strategist astatine IG, said.

Benchmark 10-year U.S. Treasury enactment yields roseate for a ‌seventh time to a one-month precocious of 4.56%, portion successful ⁠Europe, yields connected German and Italian 10-year bonds roseate by the astir successful a period to besides deed one-month highs astatine 3.06% and 3.9%, respectively.

Data this week showed crude stocks successful the U.S. Strategic Petroleum Reserve deed their lowest level since ⁠1983, leaving markets much susceptible to aboriginal proviso shocks.

"The main happening is truly whether oregon not the Strait of Hormuz remains unfastened and we inactive spot postulation (and) whether oregon not lipid tin proceed to flow," Khoon Goh, caput of Asia probe astatine ANZ successful Singapore, said.

STOCKS DROP

European shares dropped 1.6%, connected way for the biggest one-day driblet successful the STOXX ​600 ​since mid-March, portion U.S. futures fell 0.8% to 1.2%.

The VIX volatility scale jumped astir 13% ​in its largest one-day emergence successful implicit a month, though it ‌was inactive beneath the highs successful March.

The banal marketplace has already been nether immoderate unit successful the past mates of weeks, arsenic investors are progressively questioning the valuations of immoderate of this year's high-flying semiconductor and AI-linked stocks.

Samsung Electronics shares slid for a 2nd consecutive league connected Wednesday, contempt the institution flagging a staggering 19-fold emergence successful profit. Analysts and investors are acrophobic that representation spot request whitethorn dilatory successful the 2nd fractional of the year.

Over the past mates of weeks, determination has been a chiseled displacement retired of red-hot spot stocks and into different parts of the market, including financials, user stocks and backmost to the ‌so-called hyperscalers that person dominated marketplace enactment implicit the past twelvemonth oregon so.