Investor optimism faded as markets turned defensive, with capital rotating into cash holdings and energy stocks amid expectations of prolonged economic disruption.
The shift signals growing concern over structural changes in energy markets, prompting investors to move away from earlier assumptions of a short-lived shock.
The S&P 500 fell 1.5% on Friday, led by losses in major tech firms, while futures declined further in early Asian trading.
Asian equities also weakened sharply, with Japan’s Nikkei dropping 3.5% and Chinese blue chips heading for their steepest decline in months.
Bond markets faced heavy selling as rising inflation risks reduced the appeal of fixed income, pushing yields higher across major economies.
Energy-related assets outperformed, supported by surging oil prices and expectations of sustained supply constraints and higher operating costs.
Meanwhile, global equity outflows accelerated, with Asia on track for its largest monthly capital exit since 2008, reflecting broad risk aversion.
With stocks, bonds, and gold under pressure, analysts note limited safe havens, leaving cash as the preferred short-term strategy for preserving value.
