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Emerging Markets Retreat as Oil Surge Stokes Inflation Concerns

Emerging-market equities and currencies fell sharply, reversing gains from the previous two sessions as crude oil prices climbed and traders grew more cautious heading into the weekend. The selloff reflected growing anxiety among investors that elevated energy costs could reignite inflation pressures globally. Treasury yields rose accordingly, with the two-year rate reaching its highest level in 14 months as markets reassessed economic outlooks. Geopolitical tensions in the Middle East, where Iran fired missiles at regional neighbors, unsettled investors already concerned about macroeconomic headwinds. Emerging-market currencies weakened across the board during the session. The pullback marked a reversal of momentum from earlier in the week and underscored fragile market sentiment.