Yesterday, stock indices closed sharply lower. The S&P 500 fell by 1.36%, while the Nasdaq 100 lost 1.46%. The Dow Jones Industrial Average declined by 1.63%.

Global equity markets suffered a sharp sell-off triggered by a series of strikes on key energy infrastructure in the Middle East. Those events sent oil prices materially higher, which in turn intensified investor concerns about renewed inflationary pressure. The escalation of the regional conflict has injected fresh uncertainty, forcing market participants to rework portfolios and seek safer assets.

Rising energy prices, especially those of crude oil, have far-reaching consequences for the global economy. Higher energy costs not only raise operating expenses across many sectors but also feed directly into consumer prices. Elevated energy costs can spark another wave of inflation, putting central banks in a bind: tighten policy and risk slowing growth, or stand pat and risk losing control of inflation. Fearing higher inflation and slower economic growth, investors are selling risk assets such as equities, driving indices lower and souring sentiment.

Already today, the MSCI All?Country World Index has fallen by about 0.6%. Japan's Nikkei 225 plunged by more than 3.5%. At the same time, traders will continue to monitor the yen for signs of a potential break toward the 160 level against the dollar. Futures on the Euro Stoxx 50 were down nearly 2%.

As noted above, Brent crude has risen above $112/bbl after strikes by Iran and Israel on key energy targets, including significant damage to one of the world's largest LNG export facilities in Qatar, stoking concerns about the longer-term fallout from the conflict.

Regarding yesterday's Fed meeting, officials still see only one interest rate cut this year, although Chair Jerome Powell stressed that rate cuts will depend on clear progress toward lower inflation. "If we don't see that progress, then you won't see the rate cut," Powell said. His remarks prompted traders to scale back expectations for easing, reinforcing the view that rates may remain higher for longer amid energy market volatility. Markets now anticipate only about 15 basis points of Fed easing for the year, which is well below a full 25 basis point cut.

As for the S&P 500 technical analysis, buyers' immediate task today is to overcome the nearest resistance level of $6,627. This would help the index gain renewed upside momentum and could open the way to $6,638. Controlling $6,651 would further strengthen the bullish case. On the downside, buyers should defend around $6,616. A break below that level would quickly bring the trading instrument back down to $6,603 and could open the path to $6,590.