The Swiss Market Index fell 0.1% to 14,323 points on Wednesday as oil prices surged above $95 a barrel, driven by escalating U.S.-Iran tensions and renewed supply risks through the Strait of Hormuz.
Oil prices extended gains after Iran launched retaliatory strikes against U.S. military bases in the Gulf region, compounding concerns over energy supply disruptions. Brent crude rose 0.9% to $95.45 per barrel, while U.S. West Texas Intermediate climbed 0.6% to $90.74, marking the highest levels since late July. The Strait of Hormuz, a critical chokepoint for global oil and gas transit, accounts for roughly one-fifth of seaborne crude flows.
U.S. and Asian markets reacted sharply to the geopolitical flare-up, with the MSCI Asia ex-Japan index falling 1.5% and South Korea’s Kospi down more than 3%. European futures pointed to broad declines, with Stoxx 600 and DAX expected to drop 0.5% and 0.6%, respectively. Swiss equities opened weaker, with the SMI down 0.3% at 14,290 points in pre-market trading.
Swiss tech stocks led advancers after Dell’s strong quarterly results and UBS upgrades. Comet shares rose 4.5%, VAT gained 2.8%, and Inficon advanced 3.8% following target increases to 490 francs (from 446), 800 francs (from 745), and unchanged respective valuations. Montana Aerospace, a aerospace supplier undergoing leadership restructuring, was initiated at UBS with a Buy rating.
At the other end of the SMI, Amrize slumped 2.8% after Bank of America downgraded the stock to Underperform, while Holcim fell further into the index’s laggards. UBS also trimmed its UBS share price target to 29.50 francs from 30 francs, contributing to the bank’s 0.5% decline.
Nestlé shares dipped 0.7% as the food giant advanced its portfolio restructuring, agreeing to sell its mainstream vitamins, minerals and supplements business to U.S. private equity firm Yellow Wood Partners for $1 billion. The divestment shifts Nestlé’s focus toward premium nutrition segments.
Central bank policy expectations shifted as inflation pressures mounted. New Zealand’s central bank raised its benchmark rate by 25 basis points to 2.75%, while a European Central Bank hike next week is considered a foregone conclusion. Markets priced a roughly 60% probability of a Federal Reserve increase in September following hawkish remarks from Fed Chair Kevin Warsh. The Swiss National Bank maintained its cautious stance on further tightening.
The euro rose 0.1% against the Swiss franc to 0.9411, while the franc weakened slightly to 0.8127 per U.S. dollar from 0.8117 the prior session. The euro-dollar pair eased to 1.1580 from 1.1591 amid rising inflation expectations.
Economic data releases included ADP nonfarm employment figures for August, expected to show a gain of 47,000 jobs, and Bayer’s capital markets day for its Crop Science division. Investors also awaited the U.S. Beige Book report for further insight into economic conditions.
