Russian forces bombed a school in Ukraine's southeastern Zaporizhzhia region, killing 26 people, Ukrainian President Volodymyr Zelenskiy and the country's emergency services said. The school had been repurposed as an aid distribution point.
The strike immediately drove geopolitical risk premiums higher across global financial markets. The two-year Treasury yield fell three basis points to 4.86 percent in early trading as investors rotated into safe-haven debt. The dollar index climbed 0.2 percent to 105.5, reflecting traditional risk-off positioning.
Broader equity indices declined on the same risk-aversion wave. The S&P 500 dropped 0.5 percent to $7,541, while the Nasdaq Composite fell 1.1 percent to $25,164. Technology stocks bore the brunt of selling pressure, with Microsoft down 2.8 percent and Apple losing 1.8 percent.
The immediate market reaction underscores how geopolitical shocks compress risk appetite and reset rate expectations. Sustained energy price escalation from conflict expansion would reinforce sticky core inflation readings, potentially forcing central banks to hold rates higher for longer. That dynamic would steepen the curve at the long end as investors reprice terminal rate assumptions and push out duration risk along the Treasury strip.
