Stocks and bonds fall as traders fret over inflation shock from Iran war

Markets moved into risk-off mode as traders reacted to the prospect of an inflationary shock from the Iran war, driving simultaneous declines in equities and government bonds. The FT headline reports selling pressure across stocks and bonds, with the US SP 500 singled out as the primary barometer of equity weakness. Investors are weighing higher inflation and potential energy-price upside from geopolitical disruption, prompting repositioning toward safe havens and raising volatility and rate-sensitivity in fixed income. Overall market sentiment turned bearish as participants priced greater near-term macro and policy uncertainty.