Threat of US military strike against Iran sends global markets down

London — World stocks fell on Friday, as worries about a threatened US military strike against Iran and a global trade conflict took the edge off a central bank-induced rally from earlier in the week.

The New York Times said US President Donald Trump approved military strikes against Iran on Friday in retaliation for the downing of an unpiloted surveillance drone, then pulled back from launching the attacks.

Iranian officials said on Friday that Tehran had received a message from Trump through Oman warning that a US attack on Iran was imminent.

Worries over possible military strikes persist, and the MSCI world equity index, which tracks shares in 47 countries, fell from a seven-week high, driven mostly by weakness in Asian stocks. A rally by European stocks also faded, though a pan-European index was higher on the day.

“Market risk hasn’t been switched off, it’s merely gone dim,” said Stephen Innes, managing partner at Vanguard Markets. “However, it does appear equity markets are tired and may be suffering from a bit of a hangover after partying it up to post FOMC (federal open market committee).”