Global stocks retreat and bonds wilt as oil climbs

Global shares fell and bond yields rose on Monday after fresh drone-attack risk in the Gulf pushed oil prices higher, deepening inflation concerns and weighing on risk assets.

Reuters reported that the market move followed heightened tension after a drone strike near the UAE’s Barakah nuclear power plant over the weekend. The UAE said the attack caused a fire involving an electrical generator outside the plant’s inner perimeter and that there were no injuries or radiation-safety impacts.

The UN Secretary-General said he was deeply alarmed by reports of the attack near Barakah. AP separately reported that the strike sparked a fire at the edge of the plant, although no one was blamed at the time.

Higher oil prices tend to feed expectations that inflation could stay sticky, which can pressure bonds and leave equities more vulnerable. That concern helped drive the session’s retreat in global stocks and rise in yields.

Investors were also looking ahead to Nvidia’s earnings later in the week, adding another point of focus for a market already reacting to geopolitical risk.

The immediate question is whether the oil move extends and whether markets treat the Gulf escalation as a brief shock or a more durable inflation risk.