Global equity markets retreated on Friday, as escalating geopolitical tensions in the Middle East and lingering fears of interest rate hikes by major central banks pressured risk assets. In Asia, China’s Shanghai Composite Index closed down 0.32% at 3,187.56 points, with financial and energy stocks leading the decline. Hong Kong’s Hang Seng Index fell 0.95% to 17,245.38 points, affected by weak sentiment in the tech sector and concerns over China’s economic recovery pace. Japan’s Nikkei 225 Index also dropped 0.78%, as the yen strengthened against the US dollar, hurting export-oriented stocks.

European markets followed suit, with Germany’s DAX Index falling 0.83%, France’s CAC 40 Index down 0.67%, and the UK’s FTSE 100 Index declining 0.52%. The sell-off was driven by rising concerns over supply chain disruptions and energy price volatility amid ongoing tensions in the Middle East. Brent crude oil prices topped $107 per barrel on Friday, the highest level in more than six months, as investors worried about potential disruptions to oil supplies from the region.

In the United States, stocks also closed lower, with the Dow Jones Industrial Average falling 0.45%, the S&P 500 down 0.61%, and the Nasdaq Composite declining 0.87%. Federal Reserve officials’ recent hawkish comments, suggesting that interest rates may stay higher for longer to combat inflation, also weighed on market sentiment. Analysts expect market volatility to continue in the near term as investors monitor geopolitical developments and central bank policies.