Markets React to Israel-Hamas War: Stock Volatility Peaks, Bonds Hit 18-Year Lows

Stock volatility reached a six-month peak as the CBOE Volatility Index, or "fear index," surged by approximately 10%, closing at a level not seen since March 2023. The escalation of the conflict between Israel and Gaza, along with a U.S. Navy warship intercepting missiles from Yemen, contributed to heightened caution in the financial markets. Bond performance continued to lag as yields rose, and the iShares 20+ Year Treasury Bond ETF closed at its lowest level since May 2006. Equity markets also saw a notable drop, while gold acted as a safe haven. The U.S. State Department issued a travel warning amid rising risks of tensions and terrorism attacks.