Middle East Conflict Escalates: Oil Surges, Asian Equities Plunge

The conflict, now in its fifth week, escalated with reports from The Wall Street Journal, citing U.S. officials, that President Trump is considering a military operation to extract almost 1,000 pounds of uranium from Iran. Yemen's Houthi rebels claimed responsibility for a second attack on Israel within 24 hours, deepening their role in the widening war.

StoneX's senior market analyst Matt Simpson stated the conflict shows little sign of de-escalation, with tensions broadening across the region, including Iran-aligned militias attacking U.S.-linked assets and Houthi forces disrupting Red Sea shipping routes. West Texas Intermediate crude oil futures climbed 3.1% to $102.69 per barrel, and Brent crude oil futures rose 3.0% to $115.97 a barrel.

Financial markets are increasingly concerned that a lasting energy supply disruption will hurt industries such as agriculture and transportation. Commerzbank Research analysts identified a shift in market narrative from an inflation shock due to higher oil prices to damage to global growth and the labor market from a prolonged energy shock.

U.S. stock futures also declined, with eMini S&P 500 futures shedding 0.4%, eMini Nasdaq 100 off 0.5%, and eMini Dow down 0.5%.